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AIRCRAFT LEASE AGREEMENT
Dated as of May 31, 1996
BETWEEN
WESTERN PACIFIC AIRLINES, INC.
as LESSEE
and
INTERNATIONAL LEASE FINANCE CORPORATION
as LESSOR
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Aircraft Make and Model: Used Boeing 737-3Q8
Aircraft Manufacturer's Serial Number: 2299
Aircraft Registration Xxxx: N956WP (Formerly,
EC-FER)
Make and Model of Engines: CFM-56-3B2
Serial Numbers and Engines: 722248 and 722249
USED AIRCRAFT NO. 1
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TABLE OF CONTENTS
ARTICLE 1 SUMMARY OF TRANSACTION......................................... 2
1.1 Description of Aircraft ....................................... 2
1.2 Scheduled Delivery Date and Location........................... 2
1.3 Lease Term..................................................... 2
1.4 Security Deposit............................................... 2
1.5 Transaction Fee................................................ 2
1.6 Rent During Initial Lease Term................................. 2
1.7 Reserves....................................................... 2
1.8 Additional Rent for Excess Cycles.............................. 2
1.9 Country of Aircraft Registration............................... 3
1.10 Maintenance Program............................................ 3
1.11 Agreed Value of Aircraft....................................... 3
1.12 LESSOR's Bank Account.......................................... 3
ARTICLE 2 DEFINITIONS.................................................... 4
2.1 General Definitions............................................ 4
2.2 Specific Definitions........................................... 7
ARTICLE 3 PLACE AND DATE OF DELIVERY..................................... 9
3.1 Place of Delivery.............................................. 9
3.2 Scheduled Delivery Date........................................ 9
3.3 No LESSOR Liability............................................ 9
3.4 Total Loss of Aircraft Prior to Delivery....................... 9
3.5 Cancellation for Delay......................................... 9
3.6 Cancellation for Anticipated Delay............................. 9
ARTICLE 4 LEASE TERM..................................................... 11
4.1 Lease Term..................................................... 11
4.2 "Expiration Date".............................................. 11
4.3 "Termination Date"............................................. 11
4.4 Survival of Certain LESSEE Obligations........................ 12
ARTICLE 5 SECURITY DEPOSIT, TRANSACTION FEE, RENT,
RESERVES AND OTHER PAYMENTS................................... 13
5.1 Security Deposit.............................................. 13
5.2 Transaction Fee............................................... 13
5.3 Rent.......................................................... 13
5.4 Reserves...................................................... 14
5.5 Additional Rent for Excess Cycles............................. 15
5.6 LESSOR's Bank Account......................................... 15
5.7 Default Interest.............................................. 15
5.8 No Deductions or Withholdings................................. 16
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5.9 Value Added Taxes............................................. 16
5.10 Wire Transfer Disbursement Report............................. 16
5.11 Net Lease..................................................... 16
5.12 LESSOR Performance of LESSEE Obligation....................... 18
5.13 Consideration for Rent and Other Amounts...................... 18
ARTICLE 6 DELIVERY CONDITION AND INSPECTION OF
AIRCRAFT...................................................... 19
6.1 LESSEE Selection of Aircraft.................................. 19
6.2 Condition at Delivery......................................... 19
6.3 LESSEE Inspection of Aircraft at Delivery..................... 19
6.4 Delivery of Aircraft to LESSEE................................ 19
ARTICLE 7 PRE-DELIVERY, DELIVERY AND POST-DELIVERY
DOCUMENTARY AND OTHER REQUIREMENTS............................ 20
7.1 Pre-Delivery Requirements..................................... 20
7.2 Delivery Requirements......................................... 20
7.3 Post-Delivery Requirements.................................... 22
ARTICLE 8 DISCLAIMERS................................................... 23
8.1 "As Is, Where Is"............................................. 23
8.2 Waiver of Warranty of Description............................. 23
8.3 LESSEE Acknowledgement........................................ 23
8.4 LESSEE Waiver................................................. 23
8.5 Conclusive Proof.............................................. 24
8.6 No LESSOR Liability for Losses................................ 24
8.7 No Liability to Repair or Replace............................. 24
8.8 No Waiver..................................................... 24
ARTICLE 9 MANUFACTURERS' AND VENDORS' WARRANTIES........................ 25
9.1 Warranties.................................................... 25
9.2 Reassignment.................................................. 25
9.3 Warranty Claims............................................... 25
ARTICLE 10 OPERATION OF AIRCRAFT......................................... 26
10.1 Costs of Operation............................................ 26
10.2 Compliance with Laws.......................................... 26
10.3 Training...................................................... 26
10.4 No Violation of Insurance Policies............................ 26
10.5 Flight Charges................................................ 26
ARTICLE 11 SUBLEASES..................................................... 28
11.1 No Sublease without LESSOR Consent............................ 28
11.2 Subleasing Proposal Fee....................................... 28
11.3 Civil Reserve Air Fleet Program............................... 28
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11.4 Any Approved Sublease......................................... 28
11.5 Assignment of Sublease........................................ 29
11.6 Continued Responsibility of LESSEE............................ 29
ARTICLE 12 MAINTENANCE OF AIRCRAFT....................................... 30
12.1 General Obligation............................................ 30
12.2 Specific Obligations.......................................... 30
12.3 Replacement of Parts.......................................... 32
12.4 Removal of Engines............................................ 33
12.5 Installation of Engines on other aircraft..................... 33
12.6 Modifications................................................. 34
12.7 Pooling of Engines and Parts.................................. 35
12.8 Performance of Work by Third Parties.......................... 35
12.9 Reporting Requirements........................................ 35
12.10 Information Regarding Maintenance Program..................... 36
12.11 LESSOR Rights to Inspect Aircraft............................. 36
ARTICLE 13 USE OF RESERVES............................................... 37
13.1 Airframe Reserves............................................. 37
13.2 Engine Reserves............................................... 37
13.3 Reimbursement................................................. 37
13.4 Reimbursement Adjustment...................................... 38
13.5 Costs in Excess of Reserves................................... 38
13.6 Reimbursement after Termination Date.......................... 38
ARTICLE 14 TITLE AND REGISTRATION........................................ 39
14.1 Title to the Aircraft During Lease Term....................... 39
14.2 Registration of Aircraft...................................... 39
14.3 Filing of this Lease.......................................... 39
ARTICLE 15 IDENTIFICATION PLATES......................................... 40
ARTICLE 16 TAXES......................................................... 41
16.1 General Obligation of LESSEE.................................. 41
16.2 Exceptions to Indemnity....................................... 41
16.3 After-Tax Basis............................................... 42
16.4 Timing of Payment............................................. 42
16.5 Contests...................................................... 42
16.6 Tax Benefits.................................................. 43
16.7 Cooperation in Filing Tax Returns............................. 43
16.8 Survival of Obligations....................................... 43
ARTICLE 17 INDEMNITIES................................................... 44
17.1 General Indemnity............................................. 44
17.2 Exceptions to General Indemnities............................. 45
17.3 After-Tax Basis............................................... 45
17.4 Timing of Payment............................................. 45
17.5 Subrogation................................................... 46
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17.6 Notice........................................................ 46
17.7 Refunds....................................................... 46
17.8 Defense of Claims............................................. 46
17.9 Survival of Obligation........................................ 46
ARTICLE 18 INSURANCE..................................................... 47
18.1 Categories of Insurance....................................... 47
18.2 Insurance for Indemnities..................................... 47
18.3 Renewal....................................................... 47
18.4 Assignment of Rights by LESSOR................................ 47
18.5 Deductibles................................................... 47
18.6 Other Insurance............................................... 47
18.7 Information................................................... 48
18.8 Currency...................................................... 48
18.9 Grounding of Aircraft......................................... 48
18.10 Failure to Insure............................................. 48
18.11 Reinsurance................................................... 48
18.12 Limit on Hull in favor of LESSEE.............................. 49
ARTICLE 19 LOSS, DAMAGE AND REQUISITION.................................. 50
19.1 Definitions................................................... 50
19.2 Notice of Total Loss.......................................... 51
19.3 Total Loss of Aircraft or Airframe............................ 51
19.4 Surviving Engine(s)........................................... 52
19.5 Total Loss of Engine and not Airframe......................... 52
19.6 Other Loss or Damage.......................................... 53
19.7 Government Requisition........................................ 54
19.8 Division of Reserves.......................................... 54
ARTICLE 20 REPRESENTATIONS, WARRANTIES AND COVENANTS
OF LESSEE..................................................... 55
20.1 Representations and Warranties................................ 55
20.2 Covenants..................................................... 57
ARTICLE 21 REPRESENTATIONS, WARRANTIES AND COVENANTS
OF LESSOR..................................................... 58
21.1 Representations and Warranties................................ 58
21.2 Covenants..................................................... 58
ARTICLE 22 FINANCIAL AND RELATED INFORMATION............................. 60
22.1 Information about Suits....................................... 60
ARTICLE 23 RETURN OF AIRCRAFT............................................ 61
23.1 Date of Return................................................ 61
23.2 Technical Reporting........................................... 61
23.3 Return Location............................................... 61
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23.4 Aircraft Documentation Review................................. 61
23.5 Aircraft Inspection........................................... 61
23.6 Certificate of Airworthiness Matters.......................... 62
23.7 General Condition of Aircraft at Return....................... 63
23.8 Checks Prior to Return........................................ 65
23.9 Part Lives.................................................... 67
23.10 LESSEE's Continuing Obligations............................... 70
23.11 Return Acceptance Certificate................................. 71
23.12 Indemnities and Insurance..................................... 71
ARTICLE 24 ASSIGNMENT.................................................... 72
24.1 No Assignment by LESSEE....................................... 72
24.2 Sale or Assignment by LESSOR.................................. 72
24.3 LESSEE Cooperation............................................ 73
24.4 Protections................................................... 73
ARTICLE 25 DEFAULT OF LESSEE............................................. 75
25.1 LESSEE Notice to LESSOR....................................... 75
25.2 Events of Default............................................. 75
25.3 LESSOR's General Rights....................................... 76
25.4 Deregistration and Export of Aircraft......................... 77
25.5 LESSEE Liability for Damages.................................. 77
25.6 Waiver of Default............................................. 78
25.7 Present Value of Payments..................................... 78
25.8 Use of "Termination Date"..................................... 79
25.9 Mitigation of Damages......................................... 79
ARTICLE 26 NOTICES....................................................... 80
26.1 Manner of Sending Notices..................................... 80
26.2 Notice Information............................................ 80
ARTICLE 27 GOVERNING LAW AND JURISDICTION................................ 81
27.1 California Law................................................ 81
27.2 Non-Exclusive Jurisdiction in California...................... 81
27.3 Service of Process............................................ 81
27.4 Prevailing Party in Dispute................................... 81
27.5 Waiver........................................................ 81
ARTICLE 28 MISCELLANEOUS................................................. 82
28.1 Press Releases................................................ 82
28.2 Power of Attorney............................................. 82
28.3 LESSOR Performance for LESSEE................................. 82
28.4 LESSOR's Payment Obligations.................................. 82
28.5 Usury Laws.................................................... 82
28.6 Delegation by LESSOR.......................................... 82
28.7 Confidentiality............................................... 83
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28.8 Rights of Parties............................................. 83
28.9 Further Assurances............................................ 83
28.10 Use of Word "including"....................................... 83
28.11 Headings...................................................... 83
28.12 Invalidity of any Provision................................... 83
28.13 Negotiation................................................... 83
28.14 Time is of the Essence........................................ 84
28.15 Amendments in Writing......................................... 84
28.16 Counterparts.................................................. 84
28.17 Delivery of Documents by Fax.................................. 84
28.18 Entire Agreement.............................................. 84
EXHIBIT A AIRCRAFT DESCRIPTION.......................................... 86
EXHIBIT B CONDITION AT DELIVERY......................................... 87
EXHIBIT C CERTIFICATE OF INSURANCE...................................... 89
EXHIBIT D BROKERS' LETTER OF UNDERTAKING................................ 95
EXHIBIT E ESTOPPEL AND ACCEPTANCE CERTIFICATE........................... 97
EXHIBIT F OPINION OF COUNSEL............................................104
EXHIBIT G ASSIGNMENT OF RIGHTS (AIRFRAME)...............................107
EXHIBIT H ASSIGNMENT OF RIGHTS (ENGINES)................................110
EXHIBIT I RETURN ACCEPTANCE RECEIPT.....................................113
EXHIBIT J MONTHLY REPORT................................................120
EXHIBIT K AIRCRAFT DOCUMENTATION........................................123
EXHIBIT L TECHNICAL EVALUATION REPORT...................................124
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AIRCRAFT LEASE AGREEMENT
THIS AIRCRAFT LEASE AGREEMENT is made and entered into as of this 31st
day of May, 1996.
BETWEEN:
WESTERN PACIFIC AIRLINES, INC., a Delaware corporation whose address
and principal place of business is at 0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxxx Xxxxxxx, XX 00000 ("LESSEE") and INTERNATIONAL LEASE FINANCE
CORPORATION, a California corporation whose address and principal place of
business is at 1999 Avenue of the Stars, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx
00000 ("LESSOR").
The subject matter of this Lease is one (1) used Boeing 737- 3Q8
aircraft.
In consideration of and subject to the mutual covenants, terms and
conditions contained in this Lease, LESSOR hereby agrees to lease to LESSEE and
LESSEE hereby agrees to lease from LESSOR the Aircraft for the Lease Term and
the parties further agree as follows:
ARTICLE 1 SUMMARY OF TRANSACTION
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The following is a summary of the lease transaction between LESSEE and
LESSOR. It is set forth for the convenience of the parties only and will not be
deemed in any way to amend, detract from or simplify the other provisions of
this Lease.
1.1 Description of Aircraft
One used Boeing 737-3Q8
1.2 Scheduled Delivery Date and Location
On or about June 20, 1996 at Pemco Aeroplex, Inc.'s
facility in Dothan, Alabama or such other location as
may be mutually agreed upon by LESSOR and LESSEE.
1.3 Lease Term
10 years
1.4 Security Deposit
US$ 700,000, payable as follows:
Received 350,000
Upon execution of the Lease 350,000
1.5 Transaction Fee
US$ 15,000, payable upon execution of this Lease
1.6 Rent During Initial Lease Term
US$ 239,350 per month for the first four (4) months
of the Lease Term, and thereafter, US$ 243,350 per
month for the remainder of the Lease Term, payable in
advance
1.7 Reserves
A total of US$ 245, as follows:
Airframe Reserve: US$ 75 per airframe flight
hour
Engine Reserve: US$ 85 per engine flight hour
for each Engine
1.8 Additional Rent for Excess Cycles
US$ 150 for each cycle the aircraft operated
during a calendar year in excess of the maximum
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number of cycles which would result from an
average hour/cycle ratio of 1.5 hours to 1 cycle
1.9 Country of Aircraft Registration
United States
1.10 Maintenance Program
LESSEE's Maintenance Program
1.11 Agreed Value of Aircraft
US$ 23,500,000 during years 1-5
US$ 20,000,000 during years 6-10
1.12 LESSOR's Bank Account
International Lease Finance Corporation Account
No. 2-181-01503-9
National Westminster Bank USA
SPEC Leasing Midwest
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
ABA# 000000000
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ARTICLE 2 DEFINITIONS
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Except where the context otherwise requires, the following words have
the following meanings for all purposes of this Lease. The definitions are
equally applicable to the singular and plural forms of the words. Any agreement
defined below includes each amendment, modification, supplement and waiver
thereto in effect from time to time.
2.1 General Definitions.
"Aircraft" means the Airframe, the two (2) Engines, the Parts
and the Aircraft Documentation, collectively. As the context requires,
"Aircraft" may also mean the Airframe, any Engine, any Part, the Aircraft
Documentation or any part thereof individually. For example, in the context of
return to LESSOR the term "Aircraft" means the Airframe, Engines, Parts and
Aircraft Documentation collectively, yet in the context of LESSEE not creating
any Security Interests other than Permitted Liens on the Aircraft, the term
"Aircraft" means any of the Airframe, any Engine, any Part or the Aircraft
Documentation individually.
"Aircraft Documentation" means all (i) log books, Aircraft
records, manuals and other documents provided to LESSEE in connection with the
Aircraft, (ii) documents listed in the exhibit to the actual Estoppel and
Acceptance Certificate and (iii) any other documents required to be maintained
during the Lease Term by the Aviation Authority, LESSEE's Maintenance Program
and this Lease.
"Airframe" means the airframe described in Exhibit A together
with all Parts relating thereto.
"Aviation Authority" means the FAA or any Government Entity
which under the Laws of the U.S. from time to time has control over civil
aviation or the registration, airworthiness or operation of aircraft in the U.S.
If the Aircraft is registered in a country other than the U.S., "Aviation
Authority" means the agency which regulates civil aviation in such other
country.
"Aviation Documents" means any or all of the following which
at any time may be obtainable from the Aviation Authority in the State of
Registration: (i) an application for registration of the Aircraft with the
appropriate authority in the State of Registration, which will be provided by
LESSOR, (ii) the certificate of registration for the Aircraft issued by the
State of Registration, which is to be provided by LESSOR (iii) a full
certificate of airworthiness for the Aircraft specifying transport category
(passenger) to be provided by LESSOR, (iv) an air transport license, (v) an air
operator's certificate, (vi) such recordation of LESSOR's title to the Aircraft
and interest in this Lease as may be available in the State of Registration and
(vii) all such other authorizations, approvals, consents and
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certificates in the State of Registration as may be required to enable LESSEE
lawfully to operate the Aircraft.
"Business Day" means a day other than a Saturday or Sunday on
which the banks in the city where LESSOR's Bank is located and in Colorado
Springs, Colorado are open for the transaction of business of the type required
by this Lease.
"Creditor" means any lessor, owner, bank, lender, mortgagee or
other Person which is the owner of or has any interest in an aircraft engine or
aircraft operated by LESSEE.
"Creditor Agreement" means the applicable agreement between a
Creditor and LESSEE pursuant to which such Creditor owns, leases or has an
interest in either an aircraft operated by LESSEE on which an Engine may be
installed or in an aircraft engine which may be installed on the Airframe.
"Default" means any event which, upon the giving of notice,
the lapse of time and/or a relevant determination, would constitute an Event of
Default.
"Delivery" means the delivery of the Aircraft by LESSOR to
LESSEE pursuant to Articles 3 and 6.
"Delivery Date" means the date on which Delivery takes place.
"Dollars" and "$" means the lawful currency of the U.S.
"Engine" means (i) each of the engines listed on the Estoppel
and Acceptance Certificate; (ii) any replacement engine acquired by LESSOR and
leased to LESSEE pursuant to Article 19.5 following a Total Loss of an Engine;
and (iii) all Parts installed in or on any of such engines at Delivery (or
substituted, renewed or replacement Parts installed in accordance with this
Lease) so long as title thereto is or remains vested in LESSOR in accordance
with the terms of Article 12.3.
"Event of Default" means any of the events referred to in
Article 25.2.
"FAA" means the Federal Aviation Administration of the
Department of Transportation or any successor thereto under the Laws of the U.S.
"FARs" means the U.S. Federal Aviation Regulations embodied in
Title 14 of the U.S. Code of Federal Regulations, as amended from time to time,
or any successor regulations thereto.
"Government Entity" means any (i) national, state or local
government, and (ii) board, commission, department, division, instrumentality,
court, agency or political subdivision thereof.
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"Law" means any (i) statute, decree, constitution, regulation,
order or any directive of any Government Entity, (ii) treaty, pact, compact or
other agreement to which any Government Entity is a signatory or party and (iii)
judicial or administrative interpretation or application of any of the
foregoing.
"Lease" means this Aircraft Lease Agreement, together with all
Exhibits, side letters and amendments hereto.
"LESSOR's Lien" means any Security Interest arising as the
result of any act or omission of LESSOR or any Person claiming by or through
LESSOR.
"Maintenance Program" means LESSEE's maintenance program as
approved by the Aviation Authority or such other maintenance program as LESSOR
may, in its absolute discretion, accept in writing.
"Manufacturer" means Boeing Commercial Airplane Group.
"MPD" means the Maintenance Planning Document published by the
Manufacturer and applicable to the Aircraft.
"Overhaul" means the full refurbishment of the Aircraft, an
Engine, APU, landing gear, module or Part, as the case may be, in which such
equipment has been disassembled; cleaned thoroughly inspected, repaired,
reworked or had a replacement of parts; reassembled; and tested to the
tolerances and standards specified by the applicable manufacturer's overhaul
procedures manual or equivalent establishing conformity to its type design as
evidenced by a complete record of all work performed during the course of such
full refurbishment and that the Aircraft, Engine, APU, landing gear, module or
Part, as the case may be, is airworthy and released for return to service.
"Part" means any part, component, appliance, system module,
engine module, the auxiliary power unit (APU), accessory, material, instrument,
communications equipment, furnishing, LESSEE-furnished or LESSOR-purchased
equipment or other item of equipment (other than complete Engines or engines)
for the time being installed in or attached to the Airframe or any Engine or
which, having been removed from the Airframe or any Engine, remains the property
of LESSOR.
"Permitted Lien" means (i) LESSOR's Liens; (ii) Security
Interests arising in the ordinary course of LESSEE's business for Taxes either
not yet assessed or, if assessed, not yet due or being contested in good faith
in accordance with Article 16.5 or (iii) materialmen's, mechanics', workmen's,
repairmen's, employees' liens or similar Security Interests arising by operation
of Law after the Delivery Date in the ordinary course of LESSEE's business or
judgments for amounts which are either not yet due or are being contested in
good faith
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by appropriate proceedings (and for which adequate reserves have been made or,
when required in order to pursue such proceedings, an adequate bond has been
provided) so long as such proceedings do not involve any danger of sale,
forfeiture or loss of the Aircraft.
"Person" means any individual, firm, partnership, joint
venture, trust, corporation, Government Entity, committee, department, authority
or any body, incorporated or unincorporated, whether having distinct legal
personality or not.
"Prime Rate" means the rate of interest from time to time
announced by National Westminster Bank USA as its prime commercial lending rate.
"Prior Lessee" means VIVA, Vuelos Internacionales de
Vacaciones, S.A.
"Prior Lessee Lease Agreement" means the Aircraft SubLease
Agreement dated November 1, 1990 between Prior Lessee and ILFC Belgium S.A.
pursuant to which Prior Lessee is subleasing the Aircraft from ILFC Belgium
S.A., a subsidiary of LESSOR which is leasing the Aircraft from LESSOR pursuant
to the Headlease dated November 1, 1990.
"Security Interest" means any encumbrance or security
interest, however and wherever created or arising including (without prejudice
to the generality of the foregoing) any right of ownership, security, mortgage,
pledge, charge, encumbrance, lease, lien, statutory or other right in rem,
hypothecation, title retention, attachment, levy, claim or right of possession
or detention.
"State of Registration" means the U.S. or such other country
or state of registration of the Aircraft as LESSOR may, in its absolute
discretion, approve in writing.
"U.S." means the United States of America.
2.2 Specific Definitions. The following terms are defined in the
Articles referenced below:
Terms Article
----- -------
Agreed Value 19.1
Airframe Reserves 5.4.1
Default Interest 5.7
Delivery Location 3.1
Engine Reserves 5.4.1
Expenses 17.1
Expiration Date 4.2
Indemnitees 17.1
Initial Lease Term 4.1
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Lease Term 4.2
LESSOR's Assignee 24.2.2
LESSOR's Bank 5.6
Modification 12.6.1
Net Total Loss Proceeds 19.1
Operative Documents 20.1.3
Rent 5.3.1
Reserves 5.4.1
Scheduled Delivery Date 3.2
Security Deposit 5.1.1
Taxes 16.1
Termination Date 4.3
Total Loss 19.1
Total Loss Date 19.1
Total Loss Proceeds 19.1
Transaction Fee 5.2
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ARTICLE 3 PLACE AND DATE OF DELIVERY
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3.1 Place of Delivery. LESSOR will deliver the Aircraft to LESSEE
at Dothan, Alabama or such other place as may be agreed in writing between the
parties (the "Delivery Location").
3.2 Scheduled Delivery Date. As of the date of this Lease,
Delivery of the Aircraft hereunder is scheduled to occur on or about June 20,
1996. LESSOR will notify LESSEE from time to time and in a timely manner of the
exact date on which LESSOR expects Delivery to take place and will give LESSEE
at least 24 hours notice of the actual Delivery date (the "Scheduled Delivery
Date").
3.3 No LESSOR Liability. LESSOR will not be liable for any loss or
expense, or any loss of profit, arising from any delay or failure in Delivery to
LESSEE unless such delay or failure arises as a direct consequence of the
willful misconduct of LESSOR; provided, however, in the event LESSOR receives
compensation, including without limitation penalty rent, if any, from Prior
Lessee as a result of Prior Lessee's delay in returning the Aircraft, after
LESSOR has deducted a sum equal to the Rent LESSOR would have received from
LESSEE on a daily basis had the Aircraft been delivered on time, LESSOR will pay
to LESSEE any such compensation which LESSOR receives from Prior Lessee.
3.4 Total Loss of Aircraft Prior to Delivery. If a Total Loss of
the Aircraft occurs prior to Delivery, this Lease will terminate and neither
party will have any further liability to the other except that LESSOR will
return to LESSEE the Security Deposit, the Transaction Fee and any prepaid Rent.
3.5 Cancellation for Delay. If a delay, not caused by LESSEE's or
LESSOR's breach of this Lease, causes Delivery to be delayed beyond September
20, 1996, LESSEE will have the right to terminate this Lease by giving LESSOR
written notice within ten (10) Business Days after such date and this Lease will
terminate on the date of receipt of such notice. In the event of such
termination, neither party will have any further liability to the other except
that LESSOR will return to LESSEE the Security Deposit, the Transaction Fee and
any prepaid Rent. If LESSEE does not give notice of termination within such ten
(10) Business Days, LESSEE shall lose all rights to terminate under this Article
3.5, unless otherwise agreed by the parties.
3.6 Cancellation for Anticipated Delay. Promptly after LESSOR
becomes aware that in Prior Lessee's opinion a delay will cause Delivery to be
delayed beyond September 20, 1996, LESSOR will notify LESSEE. By written notice
given within ten (10) Business Days after LESSEE's receipt of such LESSOR
notice, LESSEE may by written notice to LESSOR terminate this Lease and this
Lease will terminate on the date of receipt of such notice. In the event of such
termination, neither party will have any
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further liability to the other except that LESSOR will return to LESSEE the
Security Deposit, the Transaction Fee and any prepaid Rent. If LESSEE does not
give notice of termination within such ten (10) Business Days, LESSEE shall lose
all right to terminate under Articles 3.5 and 3.6 unless otherwise agreed in
writing by the parties.
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ARTICLE 4 LEASE TERM
--------- ----------
4.1 Lease Term. The term of leasing of the Aircraft will commence
on the Delivery Date and continue for a term of ten (10) years (the "Lease
Term").
4.2 "Expiration Date". "Expiration Date" means the last day of the
Lease Term.
4.3 "Termination Date". This Lease may in fact terminate on any of
the following dates:
(a) the Expiration Date; or
(b) a date earlier than the Expiration Date, if:
(1) there is a Total Loss of the Aircraft prior
to Delivery pursuant to Article 3.4.
(2) cancellation of this Lease occurs pursuant
to Article 3.5 or 3.6.
(3) there is a Total Loss of the Aircraft,
payment is made to LESSOR in accordance with Article
19.3.
(4) this Lease is or becomes wholly or partly
invalid or unenforceable due to reasons beyond
LESSEE's and LESSOR's control and (i) LESSEE fails to
continue to perform under this Lease, (ii) after good
faith negotiation, LESSOR and LESSEE have not arrived
at a mutually acceptable alternative basis for
continuation of this Lease within fifteen (15) days
after LESSOR or LESSEE has sent a notice requiring
negotiation and (iii) LESSEE returns the Aircraft to
LESSOR in the condition required by Article 23.
(5) an Event of Default occurs and LESSOR
repossesses the Aircraft or otherwise terminates this
Lease pursuant to Article 25.3.
(c) a date later than the Expiration Date, which is the
date of return of the Aircraft in the condition required by
Article 23, if an Event of Default occurs hereunder by LESSEE
returning the Aircraft in the condition required by this Lease
after the Expiration Date.
The "Termination Date" is the date on which this Lease terminates because one of
the foregoing has occurred and LESSEE has performed all of its obligations
hereunder.
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4.4 Survival of Certain LESSEE Obligations. The obligations of
LESSEE set forth in Articles 10.5, 16 and 17 by their terms survive the
termination of this Lease. Notwithstanding the foregoing, LESSOR agrees that by
executing the Return Acceptance Receipt, LESSOR is waiving all other claims
LESSOR might otherwise have, except as may be specifically noted on the Return
Acceptance Receipt and except as to items specifically represented and warranted
by LESSEE in the Return Acceptance Receipt. For purposes of clarification,
LESSOR is not waiving any rights to indemnification in accordance with Article
10.5, 16, and 17 in the event any third party claims are made after the return
of the Aircraft relating to any action or omissions of LESSEE during the Lease
Term.
-12-
ARTICLE 5 SECURITY DEPOSIT, TRANSACTION FEE,
--------- RENT, RESERVES AND OTHER PAYMENTS
----------------------------------
5.1 Security Deposit.
5.1.1 LESSEE will pay LESSOR a security deposit of Seven Hundred
Thousand U.S. Dollars (US$ 700,000) for its lease of the
Aircraft (the "Security Deposit"). The Security Deposit is
payable as follows (in US$):
Received 350,000
Upon execution of the Lease 350,000
5.1.2 The Security Deposit may be commingled with LESSOR's general
funds and any interest earned on such Security Deposit will be
for LESSOR's account. If the Security Deposit is reduced below
the required amount by application to meet LESSEE's
unperformed obligations under this Lease, LESSEE will
replenish the Security Deposit within ten (10) days after
LESSOR's demand therefor. The Security Deposit will serve as
security for the performance by LESSEE of its obligations
under this Lease and any other agreements between LESSEE and
LESSOR relating to aircraft, engines, aircraft equipment or
the extension of credit and may be applied by LESSOR upon the
occurrence of an Event of Default hereunder or of a default
(and the expiration of applicable cure periods) by LESSEE
under any such other agreements.
5.1.3 Upon termination of this Lease in accordance with Article 4.3
other than in accordance with Article 25 hereof, LESSOR will
return to LESSEE the amount of the Security Deposit then held
by LESSOR, without interest, less an amount determined by
LESSOR to be a reasonable estimate of the costs, if any, which
LESSOR will incur to remedy any unperformed obligations of
LESSEE under this Lease, if any, including the correction of
any discrepancies from the required condition of the Aircraft
on return of the Aircraft.
5.2 Transaction Fee. Upon execution of this Lease, LESSEE will pay
LESSOR a nonrefundable transaction fee of Fifteen Thousand
U.S. Dollars (US$ 15,000) (the "Transaction Fee").
5.3 Rent.
5.3.1 LESSEE will pay LESSOR the following amounts monthly in
advance as rent for the Aircraft ("Rent"):
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Period of Lease Term Amount of Monthly Rent
-------------------- ----------------------
Months 1-4 of the
Lease Term Two Hundred Thirty Nine
Thousand Three Hundred
Fifty U.S. Dollars (US$
239,350)
Months 5-120 of the
Lease Term Two Hundred Forty Three
Thousand Three Hundred
Fifty U.S. Dollars
(US$ 243,350)
5.3.2 The first payment of Rent during the Lease Term will be paid
no later than one (1) Business Day prior to Delivery (the
first month's Rent will be $239,350 plus a per diem rental
amount necessary to cover the Rent up to the 15th day of the
following calendar month). Each subsequent payment of Rent
will be due monthly thereafter on the fifteenth (15th) day of
each month except that, if such day is not a Business Day, the
Rent will be due on the immediately preceding Business Day.
5.4 Reserves.
5.4.1 LESSEE will pay to LESSOR supplemental Rent, based on LESSEE's
use of the Aircraft during the Lease Term, the following
amounts per flight hour (individually, "Airframe Reserves" and
"Engine Reserves", and
collectively "Reserves"):
A total of US$ 245, as follows:
Airframe Reserve: US$ 75 per airframe flight
hour
Engine Reserve: US$ 85 per Engine per flight
hour (payable when the Engine
is utilized on the Aircraft or
another aircraft)
5.4.2 Such Reserves will be paid on or before the 10th day of the
calendar month next following the month in which the Delivery
Date occurs and on or before the 10th day of each succeeding
calendar month for flying performed during the calendar month
prior to payment. All Reserves for flying performed during the
month in which the Termination Date occurs will be paid on the
Termination Date, unless otherwise agreed by the parties.
-14-
5.4.3 No interest will accrue or be paid at any time to LESSEE on
such Reserves and, subject to LESSOR's obligations under
Article 13, LESSOR may commingle the Reserves with LESSOR's
general funds.
5.5 Additional Rent for Excess Cycles. If during the Lease Term,
at December 31 of any calendar year thereof, the Aircraft operated more cycles
in the preceding calendar year than the maximum number of cycles which would
result from an average hour/cycle ratio of 1.5 hours to 1 cycle, LESSEE will pay
LESSOR as additional Rent US$ 150 for each cycle the Aircraft actually operated
during such calendar year (or portion thereof) in excess of the number of cycles
which result from an average hour/cycle ratio of 1.5 hours to 1 cycle. A
calculation will be made as of December 31 each year and such additional Rent
will be due and payable by LESSEE on the date on which the next Reserve payment
is due (in accordance with Article 5.4.2) following such hour/cycle calculation
period.
Example: If the Aircraft operated 1,500 hours in a calendar year, it
would have 1,000 cycles resulting from an average hour/cycle ratio of
1.5 hours to 1 cycle. If in fact the Aircraft operated 1,100 cycles in
such calendar year, the Aircraft operated 100 excess cycles in such
calendar year and LESSEE will pay LESSOR US$ 15,000 (100 excess cycles
x 150 = US$ 15,000).
5.6 LESSOR's Bank Account. The Security Deposit, Transaction Fee,
Rent, Reserves and any other payment due to LESSOR under this Lease will be paid
by wire transfer of immediately available U.S. Dollar funds to LESSOR'S bank
account at:
International Lease Finance Corporation
Account No. 2-181-01503-9
National Westminster Bank USA
SPEC Leasing Midwest
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
ABA# 000000000
or to such other bank account in the U.S. as LESSOR may from time to time
designate by written notice ("LESSOR's Bank").
5.7 Default Interest. If LESSOR's Bank does not receive the Rent
or any other amount on or before the date when due, LESSOR will suffer loss and
damage the exact nature and amount of which are difficult or impossible to
ascertain. LESSEE will, except in the case where the non-receipt of payment is
due to LESSOR's Bank's failure to properly credit a payment that was paid on
time by LESSEE, pay LESSOR as supplemental Rent (by way of agreed compensation
and not as a penalty) interest on any due and unpaid amounts payable by LESSEE
under this Lease. Interest will be calculated at a per annum rate (based on a
360 day year)
-15-
which is equal to five percent (5%) plus the Prime Rate in effect on the date on
which the amount was originally due for the period from the date the amount was
due to, but excluding, the actual date the amount is received or, in the case of
LESSOR's performance of LESSEE's obligations hereunder, from and including the
date of payment by LESSOR to but excluding the date of LESSEE's repayment to
LESSOR ("Default Interest"). Default Interest will accrue on a day-to-day basis
and be compounded monthly.
5.8 No Deductions or Withholdings. All payments by LESSEE under
this Lease, including the Security Deposit, Transaction Fee, Rent, Default
Interest, fees, indemnities or any other item, will be made in full without any
deduction or withholding whether in respect of set-off, counterclaim, duties, or
Taxes (as defined in Article 16) imposed in the State of Registration or any
jurisdiction from which such payments are made unless LESSEE is prohibited by
Law from doing so, in which event LESSEE will gross up the payment amount such
that the net payment received by LESSOR after any deduction or withholding
equals the amounts called for under this Lease.
5.9 Value Added Taxes. The Rent and other amounts payable by
LESSEE under this Lease are exclusive of any value added tax, turnover tax or
similar tax or duty. If a value added tax or any similar tax or duty is payable
in any jurisdiction in respect of any Rent or other amounts as aforesaid, LESSEE
will pay all such tax or duty and indemnify LESSOR against any claims for the
same and any related claims, losses or liabilities.
5.10 Wire Transfer Disbursement Report. At the time of each Rent or
other payment, LESSEE will complete and fax to LESSOR a wire transfer
disbursement report stating the amount of the payment being made by LESSEE and
the allocation of such payment to the Security Deposit, Rent, Reserves, Default
Interest and other charges. Notwithstanding the allocation set forth in LESSEE's
report, in the event LESSEE is in default under this Lease, LESSOR will have
complete discretion to allocate LESSEE's payments as LESSOR determines.
5.11 Net Lease.
5.11.1 This Lease is a net lease and LESSEE's obligation to pay Rent
and make other payments in accordance with this Lease will be
absolute and unconditional under any and all circumstances,
except as set forth in Article 5.11.2, and regardless of other
events, including the following:
(a) Any right of set-off, counterclaim, recoupment,
defense or other right (including any right of reimbursement)
which LESSEE may have against LESSOR, Prior Lessee,
Manufacturer, the Engine manufacturer or
-16-
any other person for any reason, including any claim LESSEE
may have for the foregoing.
(b) Unavailability or interruption in use of the Aircraft
for any reason, including a requisition thereof or any
prohibition or interference with or other restriction against
LESSEE's use, operation or possession of the Aircraft (whether
by Law or otherwise) any defect in title, airworthiness,
merchantability, fitness for any purpose, condition, design,
specification or operation of any kind or nature of the
Aircraft the ineligibility of the Aircraft for any particular
use or trade or for registration or documentation under the
Laws of any jurisdiction or Total Loss of the Aircraft.
(c) Insolvency, bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution, liquidation, receivership,
administration or similar proceedings by or against LESSOR,
LESSEE, Prior Lessee, Manufacturer, the Engine manufacturer or
any other Person.
(d) Invalidity or unenforceability or lack of due
authorization of or other defect in this Lease.
(e) Failure or delay on the part of any party to perform
its obligations under this Lease.
(f) Any other circumstance which but for this provision
would or might have the effect of terminating or in any other
way affecting any obligation of LESSEE hereunder.
5.11.2 Nothing in Article 5.11 will be construed to limit LESSEE's
rights and remedies in the event of LESSOR's breach of its
warranty of quiet enjoyment set forth in Article 21.2.1 or to
limit LESSEE's rights and remedies to pursue in a court of law
any claim it may have against LESSOR or any other Person. In
addition, and notwithstanding anything in Article 5.11 to the
contrary, in the event that as a result of LESSOR's breach of
its warranty of quiet enjoyment LESSEE shall be deprived of
possession or use of the Aircraft under and in accordance with
the terms of this Lease, five (5) days after LESSEE has
provided LESSOR with written notice of its loss of possession
or use, provided no payment Default has occurred and is
continuing under this Lease. LESSEE may suspend payments of
Rent to LESSOR for so long as such possession or use is
interrupted. If such deprivation continues for thirty (30)
days after such notice has been given and provided no payment
Default has occurred and is continuing under this Lease,
LESSEE may terminate this Lease and return
-17-
the Aircraft to LESSOR (or if LESSEE is not in possession of
the Aircraft, LESSEE will provide reasonable assistance in
returning the Aircraft to LESSOR). In such event, upon the
return of the Aircraft, either the Aircraft will meet the
return conditions set forth in Article 23 hereof or LESSEE
will pay to LESSOR a sum sufficient to compensate LESSOR for
the hours and cycles that LESSEE has consumed on the Aircraft
Parts, and Engines since the last time the Aircraft did meet
the return conditions relating to hours and cycles. Such
amount will be determined based upon LESSEE's cost for
Airframe, Part and Engine Overhauls at the facility where
LESSEE most recently had such work performed and the Reserves
may be drawn upon for the hours which LESSEE has used since
the last Overhauls and for the purposes and subject to the
limitations under for which Reserves are reimbursable for
meeting such return conditions and providing such
compensation.
5.12 LESSOR Performance of LESSEE Obligation. If LESSEE fails to
make any payment under this Lease to a third party in connection with the
Aircraft (except where such failure results only in a Permitted Lien or in no
Lien) or fails to perform any other obligation required under this Lease, in
either case, when due, LESSOR may (but is not required to) at its election and
without waiver of its rights perform such obligation and/or pay such amount.
Within five (5) Business Days after written notice to LESSEE of the amount paid
by LESSOR on behalf of LESSEE, LESSEE will repay such amount to LESSOR together
with Default Interest. Such payment to LESSOR will constitute additional Rent
payable by LESSEE to LESSOR hereunder. Any payment, performance or compliance by
LESSOR of a LESSEE obligation hereunder will not affect the occurrence or
continuance of a Default or Event of Default, as the case may be.
5.13 Consideration for Rent and Other Amounts. The amount of the
Rent and other payments contained herein are in consideration of LESSEE's waiver
of warranties and indemnities set forth in Articles 8 and 17, respectively, and
the other provisions of this Lease.
-18-
ARTICLE 6 DELIVERY CONDITION AND INSPECTION OF AIRCRAFT
--------- ---------------------------------------------
6.1 LESSEE Selection of Aircraft. LESSEE COVENANTS TO LESSOR THAT
LESSEE HAS USED ITS OWN JUDGMENT IN SELECTING THE AIRCRAFT AND HAS DONE SO BASED
ON ITS SIZE, DESIGN AND TYPE. LESSEE ACKNOWLEDGES THAT LESSOR IS NOT A
MANUFACTURER OF THE AIRCRAFT.
6.2 Condition at Delivery. LESSOR has advised LESSEE that at
Delivery the Aircraft will be substantially in the condition set forth in
Exhibit B. To the extent that at Delivery the Aircraft is not substantially
different than as set forth in Exhibit B, LESSEE will nonetheless accept the
Aircraft but LESSEE and LESSOR will record such discrepancies on the Estoppel
and Acceptance Certificate and the return conditions set forth in Article 23
will be deemed amended in a corresponding fashion.
6.3 LESSEE Inspection of Aircraft at Delivery. LESSEE will have
the right to conduct a full ground inspection, inspection of the Aircraft
Documentation and an acceptance flight not to exceed two hours (at LESSOR's
cost) with respect to the Aircraft prior to accepting the Aircraft, comparable
to those rights set forth in Article 23 hereof. LESSEE acknowledges that, as
between it and LESSOR, in accepting the Aircraft it is relying on its own
inspection and knowledge of the Aircraft in determining whether it meets the
requirements of this Lease.
6.4 Delivery of Aircraft to LESSEE. Subject to LESSEE having
performed all of the conditions precedent to delivery set forth herein, LESSOR
will deliver the Aircraft to LESSEE at the Delivery Location. Provided that the
Aircraft is in the condition required by Article 6.2 hereof and that LESSOR has
met its obligations under this Lease, upon the tender of the Aircraft by LESSOR
to LESSEE, LESSEE will accept the Aircraft and the date of tender by LESSOR to
LESSEE will be deemed to be the Delivery Date for all purposes under this Lease,
including, but not limited to, the commencement of LESSEE's obligation to pay
Rent hereunder.
-19-
ARTICLE 7 PRE-DELIVERY, DELIVERY AND POST-DELIVERY
--------- DOCUMENTARY AND OTHER REQUIREMENTS
----------------------------------------
7.1 Pre-Delivery Requirements. LESSEE will do each of the
following prior to the Scheduled Delivery Date of the Aircraft within the
timeframes set forth below:
(a) Within one (1) month after execution of this Lease,
LESSEE will deliver to LESSOR each of the following:
(1) Copies of resolutions of the Board of
Directors of LESSEE or other written evidence of
appropriate corporate action, duly certifying and
authorizing the lease of the Aircraft hereunder and
the execution, delivery and performance of this
Lease, together with an incumbency certificate as to
the person or persons authorized to execute and
deliver documents on behalf of LESSEE hereunder.
(2) A draft opinion of counsel in substantially
the form and substance of Exhibit F.
(b) At least fourteen (14) days prior to the Scheduled
Delivery Date, LESSEE will have delivered to LESSOR a draft
Certificate of Insurance and Brokers' Letter of Undertaking in
the form and substance of Exhibits C and D, respectively, from
LESSEE's insurance brokers evidencing insurance of the
Aircraft in accordance with this Lease from the Delivery Date.
(c) At least three (3) days prior to the Scheduled
Delivery Date, LESSEE will do each of the following:
(1) Provide LESSOR with a copy of such Aviation
Documents as may be available prior to the Scheduled
Delivery Date.
(2) Provide LESSOR with such other documents as
LESSOR may reasonably request sufficiently in advance
in order to permit LESSEE to comply with such
request.
(d) At least one (1) day prior to the Scheduled Delivery
Date, LESSEE will pay to LESSOR the first monthly installment
of Rent (and any stub payment) in accordance with Article
5.3.2.
7.2 Delivery Requirements. On the Delivery Date (unless agreed
otherwise below) of the Aircraft, each of the following will occur:
-20-
(a) LESSEE and LESSOR will execute and deliver to LESSOR
an Estoppel and Acceptance Certificate in the form of Exhibit
E covering the Aircraft and effective as of the Delivery Date.
Execution of such Estoppel and Acceptance Certificate will be
conclusive proof that LESSEE has, as between LESSEE and
LESSOR, unconditionally accepted the Aircraft for lease under
this Lease.
(b) LESSEE will deliver a certificate signed by an
officer of LESSEE stating all of the following:
(1) The representations and warranties contained
in Article 20 are true and accurate on and as of the
Delivery Date as though made on and as of such date
(except to the extent that such representations and
warranties relate solely to an earlier date).
(2) No Default has occurred and is continuing or
will result from LESSEE's lease of the Aircraft
hereunder.
(3) Such officer has examined the Creditor
Agreements between LESSEE and the other Creditors and
none of such Creditor Agreements contains terms which
provide or contemplate that such Creditors will
obtain any right, title or interest in an Engine
which is installed on another aircraft (or, if this
is not the case, such officer will identify in the
certificate the parties, the aircraft and the
Creditor Agreements for which this statement is
untrue).
(c) LESSEE's counsel will deliver an opinion of counsel
substantially in the form of Exhibit F.
(d) LESSOR will deliver to LESSEE an assignment of
Manufacturer and Engine manufacturer rights in the form and
substance of Exhibits G and H.
(e) LESSEE will deliver to LESSOR a copy of such Aviation
Documents that are deliverable by LESSEE as have not been
previously delivered which are available.
(f) LESSOR will deliver to LESSEE an opinion of LESSOR's
counsel as to the due execution and delivery of the Lease by
LESSOR and as to the enforceability of the Lease.
(g) Prior to Delivery, LESSOR will register the Aircraft
in the register of aircraft of the State of Registration
showing LESSOR as the owner.
-21-
(h) LESSOR will deliver to LESSEE such Aviation Documents
that are deliverable by LESSOR.
7.3 Post-Delivery Requirements.
(a) Within seven (7) days after Delivery or as soon
thereafter as such documents become available, LESSEE and
LESSOR will provide one another with copies of all Aviation
Documents not previously delivered.
(b) Within three (3) Business Days after Delivery, LESSEE
will provide LESSOR with copies of all UCC-1 financing
statements required to be filed hereunder and, as soon as
available thereafter, evidence that all such financing
statements have been duly filed.
-22-
ARTICLE 8 DISCLAIMERS
--------- -----------
LESSOR HAS COMMITTED TO LESSEE THAT ON THE DELIVERY DATE THE AIRCRAFT
WILL BE IN THE CONDITION REQUIRED BY EXHIBIT B. SUCH COMMITMENT OR COVENANT ON
THE PART OF LESSOR EXPIRES AND THE DISCLAIMERS SET FORTH IN THIS ARTICLE 8 APPLY
UPON LESSEE'S ACCEPTANCE OF THE AIRCRAFT AND EXECUTION OF THE ESTOPPEL AND
ACCEPTANCE CERTIFICATE. AFTER SUCH TIME, THEN AS BETWEEN LESSOR AND LESSEE:
8.1 "As Is, Where Is". LESSEE UNCONDITIONALLY ACKNOWLEDGES AND
AGREES THAT NEITHER LESSOR NOR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES OR
REPRESENTATIVES HAVE MADE OR WILL BE DEEMED TO HAVE MADE ANY TERM, CONDITION,
REPRESENTATION, WARRANTY OR COVENANT EXPRESS OR IMPLIED (WHETHER STATUTORY OR
OTHERWISE) AS TO (I) THE CAPACITY, AGE, AIRWORTHINESS, VALUE, QUALITY,
DURABILITY, CONFORMITY TO THE PROVISIONS OF THIS LEASE AND THE PRIOR LESSEE
LEASE AGREEMENT, DESCRIPTION, CONDITION (WHETHER OF THE AIRCRAFT, ANY ENGINE,
ANY PART THEREOF OR THE AIRCRAFT DOCUMENTATION), DESIGN, WORKMANSHIP, MATERIALS,
MANUFACTURE, CONSTRUCTION, OPERATION, DESCRIPTION, STATE, MERCHANTABILITY,
PERFORMANCE, FITNESS FOR ANY PARTICULAR USE OR PURPOSE (INCLUDING THE ABILITY TO
OPERATE THE AIRCRAFT OR USE THE AIRCRAFT DOCUMENTATION IN ANY OR ALL
JURISDICTIONS) OR SUITABILITY OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE
ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, KNOWN OR
UNKNOWN, APPARENT OR CONCEALED, EXTERIOR OR INTERIOR, (II) THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY
RIGHTS, (III) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF
DEALING OR USAGE OF TRADE OR (IV) ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS
OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, ALL OF WHICH ARE
HEREBY EXPRESSLY EXCLUDED AND EXTINGUISHED.
8.2 Waiver of Warranty of Description. IN CONSIDERATION OF (I)
LESSEE'S RIGHTS HEREUNDER TO INSPECT THE AIRCRAFT AND (II) LESSOR'S ASSIGNMENT
TO LESSEE OF ANY EXISTING AND ASSIGNABLE WARRANTIES OF MANUFACTURER AND THE
ENGINE MANUFACTURER, LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT
DELIVERY AND ITS EXECUTION AND DELIVERY OF THE ESTOPPEL AND ACCEPTANCE
CERTIFICATE CONSTITUTE LESSEE'S WAIVER OF THE WARRANTY OF DESCRIPTION, ANY
CLAIMS LESSEE MAY HAVE AGAINST LESSOR BASED UPON THE FAILURE OF THE AIRCRAFT TO
CONFORM WITH SUCH DESCRIPTION.
8.3 LESSEE Acknowledgement. LESSEE agrees that subject to Articles
6.2 and 8.1 hereof, it is leasing the Aircraft "AS IS, WHERE IS."
8.4 LESSEE Waiver. LESSEE hereby waives as between itself and
LESSOR and agrees not to seek to establish or enforce any rights and remedies,
express or implied (whether statutory or otherwise) against LESSOR or the
Aircraft relating to any of the
-23-
matters as to which LESSOR has made a disclaimer in Articles 8.1 or 8.2.
8.5 Conclusive Proof. DELIVERY BY LESSEE TO LESSOR OF THE ESTOPPEL
AND ACCEPTANCE CERTIFICATE WILL BE CONCLUSIVE PROOF AS BETWEEN LESSOR AND LESSEE
THAT LESSEE'S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND
ENGINES AND THE AIRCRAFT AND ENGINES AND THE AIRCRAFT DOCUMENTATION ARE IN EVERY
WAY SATISFACTORY TO LESSEE.
8.6 No LESSOR Liability for Losses. LESSEE agrees that, except as
otherwise agreed in writing by LESSOR, LESSOR will not be liable to LESSEE, any
sublessee or any Person, whether in contract or tort and however arising, for
any cost, loss or damage (consequential or otherwise) arising out of the
condition of the Aircraft, whether or not due in whole or in part to an act or
omission or the active or passive negligence of LESSOR.
8.7 No Liability to Repair or Replace. LESSOR will not be liable
for any expense in repairing or replacing any item of the Aircraft or be liable
to supply another aircraft or any item in lieu of the Aircraft or any part
thereof if the same is lost, confiscated, damaged, destroyed or otherwise
rendered unfit for use.
8.8 No Waiver. Nothing in this Article 8 or elsewhere in this
Lease will be deemed to be a waiver by LESSEE of any rights it may have against
Manufacturer, the Engine manufacturer or any other Person.
-24-
ARTICLE 9 MANUFACTURERS' AND VENDORS' WARRANTIES
--------- --------------------------------------
9.1 Warranties. Effective at Delivery, LESSOR hereby assigns to
LESSEE for the duration of the Lease Term the benefit of all warranties and
indemnities given to LESSOR by Manufacturer, the Engine manufacturer and other
vendors, repair, overhaul or service facilities with respect to the Aircraft.
9.2 Reassignment. On the Termination Date, the benefit of any
warranty assigned by LESSOR to LESSEE pursuant to Article 7.2 or 9.1 will be
reassigned automatically to LESSOR or its designee. LESSEE's rights under such
warranties (including LESSEE's claims and rights to payment thereunder) will
revert to LESSOR during any period in which an Event of Default is continuing.
LESSEE at its own cost and expense will do all such things and execute such
documents as may be required for this purpose.
9.3 Warranty Claims. LESSEE will diligently and promptly pursue
any valid claims it may have against Manufacturer and others under such
warranties with respect to the Aircraft and at LESSOR's request, will provide
notice of the same to LESSOR.
-25-
ARTICLE 10 OPERATION OF AIRCRAFT
---------- ---------------------
10.1 Costs of Operation. LESSEE will pay all costs incurred in the
operation of the Aircraft during the Lease Term, for profit or otherwise,
including the costs of flight crews, cabin personnel, fuel, oil, lubricants,
maintenance, insurance, storage, landing and navigation fees, airport charges,
passenger service and any and all other expenses of any kind or nature, directly
or indirectly, in connection with or related to the use, movement and operation
of the Aircraft. The obligations, covenants and liabilities of LESSEE under this
paragraph arising prior to return of the Aircraft to LESSOR will continue in
full force and effect, notwithstanding the termination of this Lease or
expiration of the Lease Term except as set forth in Article 5.11.2.
10.2 Compliance with Laws. LESSEE agrees throughout the Lease Term
to maintain operational control of the Aircraft and use the Aircraft in
accordance with applicable Laws of the State of Registration and of any country,
state, territory or municipality into or over which LESSEE may operate and in
accordance with the applicable regulations of IATA. LESSEE will not employ,
suffer or cause the Aircraft to be used in any business which is forbidden by
Law or in any manner which may render it liable to condemnation, destruction,
seizure, or confiscation by any authority. LESSEE will not permit the Aircraft
to fly to any airport or country if so doing would cause LESSOR to be in
violation of any U.S. Law.
10.3 Training. LESSEE will not use the Aircraft for testing or for
training of flight crewmembers other than LESSEE crewmembers and will not use
the Aircraft for training any more than it utilizes for training the other
aircraft in its fleet.
10.4 No Violation of Insurance Policies. LESSEE will not use or
permit the Aircraft to be used in any manner or for any purpose which is not
covered by the insurance policies LESSEE is required to carry and maintain as
set forth in this Lease. LESSEE will not carry any goods of any description
excepted or exempted from such policies or do any other act or permit to be done
anything which could reasonably be expected to invalidate or limit any such
insurance policy.
10.5 Flight Charges.
10.5.1 LESSEE will pay promptly when due all enroute navigation
charges, navigation service charges and all other charges
payable by LESSEE (unless incurred by a third party or LESSOR
following a breach of LESSOR's covenant of quiet enjoyment)
for the use of or for services provided at any airport in
respect of the Aircraft and will indemnify and hold LESSOR
harmless in respect of the same. This indemnity will continue
in
-26-
full force and effect notwithstanding the termination or
expiration of the Lease Term for any reason or the return of
the Aircraft.
-27-
ARTICLE 11 SUBLEASES
---------- ---------
11.1 No Sublease without LESSOR Consent. LESSEE WILL NOT SUBLEASE
OR PART WITH POSSESSION OF THE AIRCRAFT OTHER THAN AS SET FORTH IN ARTICLE 11.3
HEREOF (EXCEPT FOR MAINTENANCE AND REPAIR) AT ANY TIME WITHOUT THE PRIOR WRITTEN
CONSENT OF LESSOR (NOT TO BE UNREASONABLY WITHHELD) AND IN ACCORDANCE WITH SUCH
REQUIREMENTS AS MAY FROM TIME TO TIME BE AGREED IN WRITING BETWEEN LESSOR AND
LESSEE. The wet leasing of the Aircraft during the Lease Term (in which LESSEE
and its crews retain operational control of the Aircraft) will not be considered
a sublease of the Aircraft.
11.2 Subleasing Proposal Fee. Any subleasing proposals submitted to
LESSOR will be subject to a processing fee of Twenty-five Thousand U.S. Dollars
(US$ 25,000), payable on demand (whether the sublease is approved or not). In
addition, LESSEE will indemnify LESSOR on demand for all out-of-pocket expenses
(including legal fees) incurred in connection with its assessment of the
proposal or its implementation. Notwithstanding the foregoing, if LESSEE
contacts LESSOR and suggests a sublessee which LESSOR rejects without having to
do any analysis, LESSEE will not be required to pay the processing fee.
11.3 Civil Reserve Air Fleet Program. LESSEE may subject the
Aircraft to the Civil Reserve Air Fleet Program ("CRAF") and transfer possession
of the Aircraft to the United States, or any agency or instrumentality thereof,
pursuant to CRAF, so long as (i) LESSEE shall promptly notify LESSOR upon
subjecting the Aircraft to CRAF and provide LESSOR with the name and address of
the appropriate Contracting Officer Representative for the Military Airlift
Command of the United States Air Force, (ii) LESSEE shall promptly notify LESSOR
of any such transfer, and (iii) the period of such transfer does not extend
beyond the end of the Lease Term.
11.4 Any Approved Sublease. Any sublease approved by LESSOR will be
for a term no greater than the remaining Lease Term and contain provisions
consistent with this Lease protecting LESSOR's title to the Aircraft. Any such
sublease will also provide LESSOR indemnities substantially similar to those set
forth in this Lease and contain maintenance and repair standards for the
Aircraft substantially similar to those set forth in this Lease. The insurances
which will be carried by the sublessee and the circumstances which constitute a
Total Loss of the Aircraft will also be substantially similar to those set forth
herein. Any such sublease will be subject and subordinate to this Lease. In its
sole discretion, LESSOR may require an opinion of counsel in connection with
such sublease, including LESSOR's rights to repossess the Aircraft in the event
of an Event of Default hereunder or under the sublease. LESSEE will not amend
the terms of any approved sublease without the prior written consent of LESSOR,
which will not be unreasonably withheld.
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11.5 Assignment of Sublease. Any approved sublease will be assigned
to LESSOR as security. LESSEE will deliver the original counterpart of the
sublease to LESSOR and make any filings necessary to protect LESSOR's security
interest.
11.6 Continued Responsibility of LESSEE. LESSEE will continue to be
responsible for performance of its obligations under this Lease during any
period of sublease.
-29-
ARTICLE 12 MAINTENANCE OF AIRCRAFT
---------- -----------------------
12.1 General Obligation. During the Lease Term and until the
Aircraft is returned to LESSOR in the condition required by this Lease, LESSEE
alone has the obligation, at its expense, to maintain and repair the Aircraft,
Engines and all of the Parts (i) in accordance with the Maintenance Program,
(ii) in accordance with the rules and regulations of the Aviation Authority,
(iii) in conformance to its type design, (iv) in accordance with any other
regulations or requirements necessary in order to maintain a valid Certificate
of Airworthiness for the Aircraft (except during those periods when the Aircraft
is undergoing maintenance or repairs as required or permitted by this Lease and
to the extent in conflict with the requirements of the Aviation Authority) and
(v) in the same manner and with the same care as used by LESSEE with respect to
similar aircraft, engines, and parts operated by LESSEE and without in any way
discriminating against the Aircraft.
12.2 Specific Obligations. Without limiting Article 12.1, LESSEE
agrees that such maintenance and repairs will include but will not be limited to
each of the following specific items:
(a) Performance in accordance with the Maintenance
Program of all routine and non-routine maintenance work.
(b) Incorporation in the Aircraft of all applicable
airworthiness directives or equivalent (referred to in this
Lease generally as "airworthiness directives") of the FAA and
the Aviation Authority, all alert service bulletins of
Manufacturer, Engine manufacturer and other vendors or
manufacturers of Parts incorporated on the Aircraft and any
service bulletins which must be performed in order to maintain
the warranties on the Aircraft, Engines and Parts.
(c) Incorporation in the Aircraft of all other service
bulletins of Manufacturer, the Engine manufacturer and other
vendors which LESSEE schedules to adopt within the Lease Term
for the rest of its 737-300 aircraft fleet. It is the intent
of the parties that the Aircraft will not be discriminated
from the rest of LESSEE's fleet in service bulletin compliance
(including method of compliance) or other maintenance matters.
LESSEE will not discriminate against the Engines with respect
to Overhaul build standards and life limited part
replacements.
(d) Incorporation into the Maintenance Program for the
Aircraft of a corrosion prevention and control program as
recommended by Manufacturer, the Aviation Authority and the
FAA and the correction of any discrepancies in
-30-
accordance with the recommendations of Manufacturer and the
Structural Repair Manual. In addition, all inspected areas
will be properly treated with corrosion inhibitor as
recommended by Manufacturer.
(e) Incorporation into the Maintenance Program of an
anti-fungus/biological growth and contamination prevention,
control and treatment program of all fuel tanks in accordance
with Manufacturer's approved procedures.
(f) Providing LESSOR with written summaries of the
results of all maintenance and inspection sampling programs,
if any, involving or affecting the Aircraft and the rest of
its 737-300 aircraft fleet.
(g) Maintaining in English and keeping in an up-to-date
status the records and historical documents set forth in
Attachment 1 of Exhibit I, however LESSEE will not be
responsible for any specific documents not delivered to LESSEE
by LESSOR or for the translation of any documents delivered by
LESSOR in a language other than English.
(h) Maintaining historical records, in English, for
on-condition, condition-monitored, hard time and life limited
Parts (including certification documents from the manufacturer
of such Part or a repair facility which evidence that such
Part is new or overhauled and establish authenticity, total
time in service expressed in hours, cycles and/or calendar
time as applicable and time since overhaul for such Part), the
hours and cycles the Aircraft and Engines operate and all
maintenance and repairs performed on the Aircraft.
(i) Properly documenting and maintaining historical
records of all maintenance, repairs, Modifications,
alterations, compliance with Airworthiness Directives,
accomplishment of instructions and recommendations from the
manufacturer such as service bulletins, service letters,
in-service activities, etc., and the addition, removal or
replacement of equipment, systems or components in accordance
with the rules and regulations of the Aviation Authority and
reflecting such items in the Aircraft Documentation. In
addition, all repairs to the Aircraft will be accomplished in
accordance with Manufacturer's Structural Repair Manual (or
FAA- approved data supported by FAA Form 8110-3 or equivalent
and FAA Form 337). All Modifications and alterations will also
be accomplished in accordance with FAA-approved data supported
by FAA Form 8110-3 or equivalent and FAA Form 337.
-31-
(j) Ensuring that Overhauls are accomplished utilizing
maintenance and quality control procedures approved by the
Aviation Authority and that the repair agency provides a
complete record and description of all work performed during
the course of such overhaul including teardown, inspection,
shop findings reports and certifies that such Overhaul was
accomplished in accordance with the manufacturer's overhaul
manual, that the equipment is airworthy and released for
return to service and that the Aircraft, Engine, or Part was
in conformity with its original type design.
12.3 Replacement of Parts.
12.3.1 LESSEE, at its own cost and expense, will promptly replace all
Parts that may from time to time become worn out, lost,
stolen, destroyed, seized, confiscated, damaged beyond repair
or rendered unfit or beyond economical repair (BER) for use
for any reason. In the ordinary course of maintenance, repair,
Overhaul or testing, LESSEE may remove any Part provided that
LESSEE replaces such part as promptly as practicable. All
replacement Parts will (i) be free and clear of all Security
Interests (except Permitted Liens) of any kind or description,
(ii) be in airworthy condition and of at least equivalent
model, service bulletin and modification status and have a
value and utility at least equal to the Parts originally
installed at Delivery and (iii) have a current FAA-approved
"serviceable tag" of the manufacturer or maintenance facility
providing such items to LESSEE, indicating that such Parts are
new, serviceable or overhauled. So long as a substitution
meets the requirements of the Maintenance Program and Aviation
Authority, LESSEE may substitute for any Part a part that does
not meet the requirements of the foregoing sentence if a
complying Part cannot be procured or installed within the
available groundtime of the Aircraft and as soon as
practicable the noncomplying part is removed and replaced by a
complying Part.
12.3.2 All Parts removed from the Airframe or any Engine will remain
the property of LESSOR and subject to this Lease no matter
where located, until such time as such Parts have been
replaced by Parts (which have been incorporated or installed
in or attached to the Airframe or such Engine) which meet the
requirements for replacement Parts specified above and title
to such replacement Parts has passed to LESSOR under the Laws
of the State of Registration and lex situs. To the extent
permitted by the Laws of the State of Registration and the lex
situs it is the intent of LESSOR and LESSEE that without
further act and immediately upon any replacement Part becoming
-32-
incorporated, installed or attached to the Airframe or an
Engine as above provided, (i) title to the removed Part will
thereupon vest in LESSEE, free and clear of all rights of
LESSOR, (ii) title to the replacement Part will thereupon vest
in LESSOR free and clear of all rights of LESSEE and (iii)
such replacement Part will become subject to this Lease and be
deemed to be a Part hereunder to the same extent as the Parts
originally incorporated or installed in or attached to the
Airframe or such Engine.
12.4 Removal of Engines.
12.4.1 If an Engine is removed for testing, service, repair,
maintenance, overhaul work, alterations or modifications,
title to such Engine will at all times remain vested in
LESSOR.
12.4.2 LESSEE will be entitled to remove any of the Engines from the
Aircraft and install another engine or engines on the
Aircraft, provided that LESSEE complies with each of the
following obligations:
(a) The insurance requirements set forth in Article 18
and Exhibit C are in place.
(b) LESSEE ensures that the identification plates
referred to in Article 15 are not removed from any Engine upon
such Engine being detached from the Aircraft.
(c) Title to the Engine remains with LESSOR free from all
Security Interests (except Permitted Liens) regardless of the
location of the Engine or its attachment to or detachment from
the Aircraft.
12.5 Installation of Engines on other aircraft. Any Engine removed
from the Aircraft may be installed on another aircraft in
LESSEE's fleet which utilizes engines of the same type as
the Engine only if one of the situations described in this
Article 12.5 exists:
12.5.1 LESSEE or LESSOR has title to such other aircraft free and
clear of all Security Interests (except Permitted Liens).
12.5.2 LESSEE, LESSOR and all of the Creditors of LESSEE of such
aircraft enter into an engines cooperation agreement in form
and substance acceptable to LESSOR in which each party agrees
to recognize the other parties' rights in the engines. LESSEE
will reimburse LESSOR and its Lender for their reasonable
attorneys' fees and costs in negotiating and finalizing the
engine cooperation agreements with LESSEE and its Creditors.
-33-
12.5.3 Such other aircraft is subject to a Creditor Agreement (but no
other Security Interests except Permitted Liens) which by its
terms expressly or effectively states that such Creditor and
its successors and assigns will not acquire any right, title
or interest in any Engine by reason of such Engine being
installed on such aircraft. To evidence the foregoing, at or
before Delivery, LESSEE will provide LESSOR with an officer's
certificate as to this matter (and such an officer's
certificate will be provided annually during the Lease Term in
accordance with Article 22 with respect to other Creditor
Agreements regarding aircraft entering LESSEE's operating
fleet subsequent to Delivery). LESSEE hereby agrees that if
LESSOR's title to an Engine is in fact impaired under any such
Creditor Agreement, such impairment will be a Total Loss of
such Engine and the provisions of Article 19.5 will apply. To
the extent another Creditor Agreement contains such
provisions, then LESSOR hereby agrees for the benefit of the
Creditor of such Creditor Agreement that neither LESSOR nor
its successors or assigns will acquire or claim any right,
title or interest in any engine in which LESSEE or another
Creditor has an interest as a result of such engine being
installed on the Airframe.
12.6 Modifications.
12.6.1 No modification, alteration, addition or removal to the
Aircraft ("Modification") expected to cost over Four Hundred
Thousand U.S. Dollars (US$ 400,000) or deviation from the
Aircraft's original type design or configuration will be made
without the prior written consent of LESSOR, which consent
will not be unreasonably withheld. "Modifications" do not
include airworthiness directives of the Aviation Authority or
FAA or Manufacturer's recommended service bulletins or any
other work required to be performed by LESSEE under this
Lease, for which LESSOR consent is not required.
12.6.2 LESSOR may review LESSEE's proposed designs, plans,
engineering drawings and diagrams, and flight and maintenance
manual revisions for any proposed Modification. If requested
by LESSOR, LESSEE will furnish LESSOR with such documents in
final form and any other documents required by Law, as a
result of such Modification. All Modifications incorporated on
the Aircraft will be properly documented in the Aircraft
Documentation and be fully approved by the Aviation Authority.
12.6.3 Notwithstanding any other provision of this Lease, no
modification will be made which has the effect of
-34-
decreasing the utility or value of the Aircraft or
invalidating any warranty applicable to the Aircraft.
12.6.4 No Modification will be made by LESSEE if an Event of Default
exists and is continuing hereunder.
12.6.5 Unless otherwise agreed by LESSOR in writing, all permanent or
structural Modifications (except for the installation of a
leased telephone system) will forthwith become a part of the
Aircraft and LESSEE relinquishes to LESSOR all rights and
title thereto. However, all temporary and non-structural
Modifications will remain the property of LESSEE and, at
LESSEE's option or LESSOR's request and LESSEE's cost, will be
removed from the Aircraft prior to return of the Aircraft,
with LESSEE restoring the Aircraft to the condition it was in
prior to the Modification in a manner cosmetically acceptable
to LESSOR. Notwithstanding the foregoing, no such removal will
be permitted without LESSOR's permission after the occurrence
of an Event of Default hereunder and immediately upon the
occurrence of an Event of Default hereunder, without the
requirement of any further act or notice, all right, title and
interest in such Modifications will immediately vest in
LESSOR.
12.6.6 LESSOR will bear no liability for the cost of Modifications of
the Aircraft whether in the event of grounding or suspensions
of certification, or for any other cause.
12.7 Pooling of Engines and Parts. LESSEE may subject the Engines
and Parts to normal interchange or pooling agreements with responsible scheduled
commercial air carriers customary in the airline industry and entered into by
LESSEE in the ordinary course of its business with respect to its entire 737-300
fleet so long as (i) in the case of pooling of an Engine, such Engine is
returned to LESSEE within three (3) months, (ii) no transfer of title to the
Engine occurs, (iii) all other terms of this Lease continue to be observed with
respect to the Engines or Parts, including but not limited to Articles 8, 10,
14, 15, 16, 17, 18 and 19 and (iv) LESSEE continues to be fully responsible to
LESSOR for the performance of all of its obligations hereunder.
12.8 Performance of Work by Third Parties. Whenever maintenance and
repair work on the Aircraft or Engines will be regularly performed by a Person
other than LESSEE, such Person will be an FAA-approved repair station.
12.9 Reporting Requirements.
(a) Commencing with a report furnished ten (10) days
after the end of the calendar month in which Delivery
-35-
occurs, LESSEE will furnish to LESSOR a monthly report in
English in the form attached hereto as Exhibit J or another
form that contains substantially the same information. Each
monthly report will be furnished within ten (10) days after
the end of each calendar month, except that the monthly report
pertaining to the last month (or any portion thereof) of the
Lease Term will be furnished to LESSOR on the Termination
Date.
(b) Thirty (30) days prior to the induction of the
Aircraft into each "C" check, LESSEE will advise LESSOR of the
location of the check, the date the Aircraft will be inducted
and the workscope.
(c) Upon LESSOR's request, LESSEE will provide LESSOR
with a technical report for the Aircraft in the form and
substance of Exhibit L, as revised.
12.10 Information Regarding Maintenance Program. LESSEE will provide
LESSOR with a copy of or information regarding the Maintenance Program for the
Aircraft, as requested by LESSOR and LESSOR will maintain the confidentiality of
such Maintenance Program and/or such information.
12.11 LESSOR Rights to Inspect Aircraft. On reasonable notice,
LESSOR and/or its authorized agents or representatives will have the right to
inspect the Aircraft and Aircraft Documentation. LESSOR agrees that such
requests will be coordinated with LESSEE so as to cause the minimum practical
disturbance to LESSEE's operation or its personnel. LESSEE agrees to cooperate
with LESSOR in making the Aircraft and Aircraft Documentation available to such
authorized technical teams. LESSOR will have no duty to make any such inspection
and will not incur any liability or obligation by reason of (and LESSEE's
indemnity obligations pursuant to Article 17 will apply notwithstanding) not
making any such inspection or by reason of any reports it receives or any
reviews it may make of the Aircraft records.
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ARTICLE 13 USE OF RESERVES
---------- ---------------
13.1 Airframe Reserves. LESSOR will reimburse LESSEE from the
Airframe Reserves for the actual cost of the structural inspection portion of
completed scheduled "C" checks as described in the MPD and the rectification of
any structural deficiencies resulting from such inspection, with work performed
for all other causes excluded, including those causes set forth in Article 13.4.
Excluding handling, packaging, shipping charges, and Taxes, reimbursement will
be made up to the amount in the Airframe Reserve.
13.2 Engine Reserves.
13.2.1 Subject to the limitations set forth in Article 13.2.2, LESSOR
will reimburse LESSEE from the Engine Reserves for the actual
cost associated with performance restoration or the
replacement of life limited parts or permanent repair of
on-condition parts in the basic Engine during completed Engine
shop visits (i.e. heavy maintenance visits) requiring off-wing
teardown and/or disassembly, with work performed for all other
causes excluded, including those causes set forth in Article
13.4. Subject to Article 13.2.2 and excluding handling,
packaging, and shipping charges and Taxes, reimbursement for
an Engine will be made up to the amount in the Engine Reserve
applicable to such Engine.
13.2.2 Twenty-five percent (25%) of the per hour Engine Reserve
payable by LESSEE for an Engine will be designated and will be
reimbursable solely for the replacement of life limited parts
in such Engine.
13.3 Reimbursement. LESSOR shall reimburse LESSEE from the Reserves
after the work is completed and invoices and proper documentation have been
submitted to LESSOR, provided such documentation is submitted within six (6)
months after completion of the work. LESSOR will use diligent and reasonable
efforts to reimburse Reserves as soon as possible but in no event later than
thirty (30) days following receipt of the complete and proper documentation. In
the event any portion of a claim is being disputed, LESSOR will reimburse the
undisputed portion within said 30 days and the disputed portion at such time as
the dispute is resolved. For the Airframe, proper documentation includes a list
of all routine and non-routine work cards with corresponding references to the
MPD task card reference and an itemized labor and materials report. For each
Engine, proper documentation includes a description of the reason for removal,
TSN and CSN at removal, a shop teardown report, a shop findings report, a full
description of the workscope and complete disk records for the Engine both prior
to and after the shop visit. Both the invoice supplied by the Engine repair
facility and that submitted by LESSEE to LESSOR with respect to an Engine will
state whether or
-37-
not credits were provided due to life remaining on any removed Engine Parts and
the amount of any such credits will be itemized.
13.4 Reimbursement Adjustment. By way of example, among the
exclusions from reimbursement are those items resulting from repairs covered by
LESSEE's or a third party's insurance, (deductibles being for the account of
LESSEE) or required as a result of an airworthiness directive, manufacturer's
service bulletin, faulty maintenance or installation, improper operations,
misuse, neglect, accident, incident, ingestion, or other accidental cause.
Reimbursement from the Reserves will not be available for the APU, thrust
reversers, landing gear or any of their associated-components. All invoices
subject to reimbursement from LESSOR will be reduced (by adjustment between
LESSEE and LESSOR retroactively if necessary) by the actual amounts received by
LESSEE on account of such work from responsible third parties or other sources,
such as insurance proceeds, manufacturer's warranties, guarantees, concessions
and credits (including, with respect to Engines, credits due to life remaining
on any removed Engine Parts).
13.5 Costs in Excess of Reserves. LESSEE will be responsible for
payment of all costs in excess of the amounts reimbursed hereunder. If on any
occasion the balance in the Airframe or an Engine Reserve is insufficient to
satisfy a claim for reimbursement in respect of the Airframe or such Engine, the
shortfall may not be carried forward or made the subject of any further claim
for reimbursement.
13.6 Reimbursement after Termination Date. LESSEE may not submit
any invoice for reimbursement from the Reserves after the Termination Date
unless on or prior to such date LESSEE has notified LESSOR in writing that such
outstanding invoice will be submitted after the Termination Date and the
anticipated amount, of such invoice. So long as LESSEE has provided such notice
to LESSOR, LESSEE may then submit such outstanding invoice at any time within
six (6) months after the Termination Date. Subject to the foregoing, any balance
remaining in the Airframe and Engine Reserves on the Termination Date, will be
retained by LESSOR. Notwithstanding the foregoing, following a Total Loss of the
Aircraft, any balance remaining in the Reserves will be shared equally by LESSOR
and LESSEE after deducting and first paying to LESSEE any reimbursable amounts
for which LESSEE has already submitted invoices.
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ARTICLE 14 TITLE AND REGISTRATION
---------- ----------------------
14.1 Title to the Aircraft During Lease Term. Title to the Aircraft
will be and remain vested in LESSOR. LESSOR and LESSEE intend this Lease to be a
"true lease." LESSEE will have no right, title or interest in the Aircraft
except as provided in this Lease.
14.2 Registration of Aircraft. LESSOR at LESSEE's sole cost and
expense will (i) register and maintain registration of the Aircraft in the name
of LESSOR at the register of aircraft in the State of Registration, and (ii)
file UCC-1 financing statements regarding the Aircraft and LESSOR's interest
therein in the State of Colorado. LESSEE will, to the extent possible, from time
to time, take all other steps then required by Law (including the Geneva
Convention if applicable) or by practice, custom or understanding or as LESSOR
may reasonably request to protect and perfect LESSOR's interest in the Aircraft
and this Lease in the State of Registration or in any other jurisdictions in or
over which LESSEE may operate the Aircraft.
14.3 Filing of this Lease. To the extent permitted by Law and in
accordance with the requirements of the Law from time to time, LESSEE at its
sole cost and expense will cause this Lease to be kept, filed, recorded and
refiled or rerecorded at the FAA, with the proviso that the commercial terms are
to be reacted prior to recordation.
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ARTICLE 15 IDENTIFICATION PLATES
---------- ---------------------
LESSOR will affix and LESSEE will at all times maintain on the Airframe
and each Engine the identification plates containing the following legends or
any other legend requested by LESSOR in writing:
Airframe Identification Plates
------------------------------
Location: One to be affixed to the Aircraft structure above the
forward entry door adjacent to and not less prominent
than that of the Manufacturer's data plate and
another in a prominent place on the flight deck.
Size: No smaller than 4" X 6"
Legend: "THIS AIRCRAFT IS OWNED BY INTERNATIONAL LEASE
FINANCE CORPORATION.
MANUFACTURER'S SERIAL NO: 24299
OWNER'S ADDRESS:
INTERNATIONAL LEASE FINANCE CORPORATION 1999 Avenue
of the Stars, 00xx Xxxxx Xxx Xxxxxxx, Xxxxxxxxxx
00000 Xxxxxx Xxxxxx of America
Telex: 69-1400 INTERLEAS BVHL
Fax: (000) 000-0000"
Engine Identification Plates
----------------------------
Location: The legend on the plate must be no less prominent
than the Engine data plate and must be visible.
Size: No smaller than 2" X 6"
Legend
(Engines): "THIS ENGINE IS OWNED BY INTERNATIONAL LEASE FINANCE
CORPORATION, LOS ANGELES, CALIFORNIA, USA."
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ARTICLE 16 TAXES
---------- -----
16.1 General Obligation of LESSEE. Except as set forth in Article
16.2, LESSEE agrees to pay promptly when due, and to indemnify and hold harmless
LESSOR on a full indemnity basis from, all license and registration fees and all
taxes, fees, levies, imposts, duties, charges, deductions or withholdings of any
nature (including without limitation any value added, franchise, transfer,
sales, gross receipts, use, business, excise, personal property, stamp or other
tax) together with any assessments, penalties, fines, additions to tax or
interest thereon, however or wherever imposed (whether imposed upon LESSEE,
LESSOR, on all or part of the Aircraft, the Engines or otherwise), by any
Government Entity or taxing authority in the U.S. or any foreign country or by
any international taxing authority (including the City or County of Los
Angeles), upon or with respect to, based upon or measured by any of the
following (collectively, "Taxes"):
(a) the Aircraft, the Engines or any Parts.
(b) the use, operation or maintenance of the Aircraft or
carriage of passengers or freight during the Lease Term.
(c) this Lease, the payments due hereunder and the terms
and conditions hereof.
(d) the ownership, financing, delivery, import or export,
return, sale, payment of Total Loss Proceeds or other
disposition of the Aircraft.
16.2 Exceptions to Indemnity. The indemnity provided for in Article
16.1 does not extend to any of the following Taxes:
(a) Imposed by the U.S., any State thereof or any foreign
country or international taxing authority on the net or gross
income, gross receipts, capital or net worth of LESSOR, or
doing business, franchise, minimum or similar Taxes.
(b) Attributable to the period prior to Delivery or after
return of the Aircraft to LESSOR in accordance with this Lease
or after the termination of this Lease (it being understood
and agreed that the exclusion contained in this Section
16.2(b) shall not apply to Taxes assessed following such
periods or prior to such periods) if such Taxes are
attributable to such periods.
(c) Attributable to LESSOR's gross negligence, willful
misconduct or breach of this Lease.
-41-
(d) (I) Imposed as a result of a sale, assignment,
transfer or other disposition (whether voluntary or
involuntary) by LESSOR of any legal or beneficial interest in
the Aircraft or in this Lease (a "LESSOR, Transfer") or (II)
to the extent such Taxes exceed the amount of Taxes that would
have been imposed and indemnified against by the LESSEE had
there not been a LESSOR Transfer; provided that the exclusion
set forth in this subparagraph (d) shall not apply to a LESSOR
Transfer resulting from LESSOR's exercise of any remedies
provided for in Article 25 in connection with an Event of
Default that has occurred and is continuing.
(e) Being contested in accordance with the provisions of
Section 16.5.
(f) That would not have been imposed but for any failure
of LESSOR to (i) file proper and timely reports or returns or
to pay any Taxes when due, or (y) comply with any
certification, information, documentation, reporting or other
similar requirements concerning the nationality, residence,
identity or connection with the jurisdiction imposing such
Taxes, if such compliance is required to obtain or establish
relief or exemption from or reduction in such Taxes and LESSOR
was eligible to comply with such requirement.
16.3 After-Tax Basis. The amount which LESSEE is required to pay
with respect to any Taxes indemnified against under Article 16.1 is an amount
sufficient to restore LESSOR on an after-tax basis to the same position LESSOR
would have been in had such Taxes not been incurred.
16.4 Timing of Payment. Any amount payable to LESSOR pursuant to
this Article 16 will be paid within ten (10) days after receipt of a written
demand therefor from LESSOR accompanied by a written statement describing in
reasonable detail the basis for such indemnity and the computation of the amount
so payable (and if reasonably requested by LESSEE, LESSOR will provide
additional information as may be reasonably necessary to substantiate such
claims) provided, however, that such amount need not be paid by LESSEE prior to
the earlier of (i) the date any Tax is payable to the appropriate Government
Entity or taxing authority or (ii) in the case of amounts which are being
contested by LESSEE in good faith or by LESSOR pursuant to Article 16.5, the
date such contest is finally resolved.
16.5 Contests. If written claim is made against LESSOR for Taxes
with respect to which LESSEE is liable for a payment or indemnity under this
Lease, LESSOR will promptly give LESSEE notice in writing of such claim
provided, however, that LESSOR's failure to give notice will not relieve LESSEE
of its obligations hereunder, unless such failure materially impairs or
precludes
-42-
LESSEE's ability to contest the claim. So long as (i) a contest of such Taxes
does not involve any danger of the sale, forfeiture or loss of the Aircraft or
any interest therein, (ii) if LESSOR so requests, LESSEE has provided LESSOR
with an opinion of independent tax counsel that a reasonable basis exists for
contesting such claim and (iii) adequate reserves have been made for such Taxes
or, if required, an adequate bond has been posted, then LESSOR at LESSEE's
written request will in good faith, with due diligence and at LESSEE's expense,
contest (or permit LESSEE to contest in the name of LESSEE or LESSOR) the
validity, applicability or amount of such Taxes.
16.6 Tax Benefits. Upon receipt by LESSOR of a refund of all or any
part of any Taxes (including any deductions or withholdings referred to in
Article 5.8) which LESSEE has paid, LESSOR will promptly pay to LESSEE an amount
that is equal to the amount of such Tax Benefit, or any other Tax Benefit
resulting from Taxes paid by LESSEE.
16.7 Cooperation in Filing Tax Returns. LESSEE and LESSOR will
cooperate with one another in providing information which may be reasonably
required to fulfill each party's tax filing requirements and any audit
information request arising from such filing. LESSOR shall furnish from time to
time to LESSEE such returns, statements or other documentation ("Tax Forms") in
such form and with such substance as in the reasonable opinion of LESSEE shall
enable LESSOR or LESSEE to claim an available reduction of or exemption from
Taxes that LESSEE may be required to pay or indemnify against hereunder.
16.8 Survival of Obligations. The representations, warranties and
agreements of LESSEE provided for in this Article 16 shall survive the
Termination Date and the indemnities provided for in this Article 16 shall
survive until the expiration of the applicable statute of limitations for the
Taxes to which such indemnities relate.
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ARTICLE 17 INDEMNITIES
---------- -----------
17.1 General Indemnity. Except as set forth in Article 17.2, LESSEE
agrees to indemnify and hold harmless LESSOR and its officers, directors,
employees, agents and shareholder (individually an "Indemnitee" and collectively
"Indemnitees") from any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, costs, disbursements and expenses (including
legal fees, costs and related expenses) of every kind and nature, whether or not
LESSEE accepts the Aircraft (however, if LESSEE has not accepted the Aircraft,
LESSEE will not be obligated to indemnify LESSOR for Expenses arising out of
subparagraphs (b), except with respect to inspections or injury or death to
LESSEE employees or agents, (c), or (e)) (collectively "Expenses"), which are
imposed on, incurred by or asserted against any Indemnitee and which are in any
way relating to, based on or arising out of any of the following:
(a) This Lease or any transactions contemplated hereby.
(b) The operation, possession, use, non-use, control,
leasing, subleasing, maintenance, storage, Overhaul testing,
inspections or return flights of the Aircraft, any Engine or
any Part during the Lease Term by LESSEE, any sublessee or any
other Person, whether or not the same is in compliance with
the terms of this Lease, including without limitation claims
for death, personal injury, property damage, other loss or
harm to any Person and claims relating to any Laws, including
without limitation environmental control, noise and pollution
laws, rules or regulations.
(c) The manufacture, design, sale after an Event of
Default, acceptance hereunder, rejection, delivery, return,
export after an Event of Default, condition, repair,
modification, servicing, rebuilding, enforcement of warranties
whether in LESSOR's or LESSEE's name, airworthiness,
registration, reregistration, performance, merchantability,
fitness for use, substitution or replacement of the Aircraft,
Engine or any Part under this Lease or other transfer of use
or possession of the Aircraft, Engine or any Part, including
under a pooling or interchange arrangement, including without
limitation, latent and other defects, whether or not
discoverable, and patent, trademark or copyright infringement.
(d) Any non-compliance by LESSEE with any term of this
Lease or the falsity or inaccuracy of any representation or
warranty of LESSEE set forth herein.
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(e) The prevention or attempt to prevent the arrest,
confiscation, seizure, taking in execution, impounding,
forfeiture or detention of the Aircraft, or in securing the
release of the Aircraft.
(f) As a consequence of any Default in payment by LESSEE
of any sum to be paid by LESSEE when due under this Lease or
any other Default by LESSEE in the due and punctual
performance of its obligations under this Lease.
The foregoing indemnity by LESSEE is intended to include and cover any Expense
to which an Indemnitee may be subject (in contract, tort, strict liability or
under any other theory) regardless of the negligence, active or passive or any
other type, of such Indemnitee, so long as such Expense does not fall within any
of the exceptions listed in Article 17.2.
17.2 Exceptions to General Indemnities. The indemnity provided for
in Article 17.1 will not extend to Expenses of any Indemnitee to the extent
resulting from or arising out of any of the following:
(a) Expenses which LESSEE and LESSOR mutually agree or,
absent mutual agreement, are judicially determined to have
resulted from the willful misconduct of, or breach of this
Lease by, any Indemnitee.
(b) Expenses which LESSEE and LESSOR mutually agree or,
absent mutual agreement, are judicially determined to be
attributable to acts or events which occurred prior to
Delivery or after the Termination Date and return of the
Aircraft to LESSOR in the condition required hereunder.
(c) Expenses representing Taxes, it being acknowledged
that the terms of Article 16 represent LESSEE's sole indemnity
obligations with respect to Taxes.
(d) Expenses due to the breach by LESSOR of its covenant
of quiet enjoyment pursuant to Article 22.1.
17.3 After-Tax Basis. The amount which LESSEE will be required to
pay with respect to any Expense indemnified against under this Article 17 will
be an amount sufficient to restore the Indemnitee, on an after-tax basis, to the
same position such Indemnitee would have been in had such Expense not been
incurred.
17.4 Timing of Payment. LESSEE will pay an Indemnitee or the party
claiming such Expense for Expenses pursuant to this Article 17 whether or not
the claim that gave rise to any Expense indemnified under this Article 17 is
meritorious and whether or not liability with respect to such claim is
established (but subject to Article 17.8) within fifteen (15) days after receipt
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of a written demand therefor from such Indemnitee accompanied by a written
statement describing in reasonable detail the basis for such indemnity and if
such payment is to be made directly to the Indemnitee, providing reasonable
evidence that such Indemnitee has, in fact, paid the amount so claimed.
17.5 Subrogation. Upon the payment in full of any indemnity
pursuant to this Article 17 by LESSEE, LESSEE will be subrogated to any right of
the Indemnitee in respect of the matter against which such indemnity has been
made.
17.6 Notice. Each Indemnitee and LESSEE will give prompt written
notice one to the other of any liability of which such party has knowledge for
which LESSEE is, or may be, liable under this Article 17 provided, however, that
failure to give such notice will not terminate any of the rights of Indemnitees
under this Article 17 except to the extent that LESSEE has been materially
prejudiced by the failure to provide such notice.
17.7 Refunds. If any Indemnitee obtains a recovery of all or any
part of any amount which LESSEE has paid to such Indemnitee, such Indemnitee
will pay to LESSEE the net amount recovered by such Indemnitee together with
interest thereon from the date of payment to LESSOR.
17.8 Defense of Claims. Unless a payment Default or an Event of
Default has occurred and is continuing, LESSEE and its insurers will have the
right (in each such case at LESSEE's sole expense) to investigate or, provided
that LESSEE or its insurers have not reserved the right to dispute liability
with respect to any insurance policies pursuant to which coverage is sought,
defend or compromise any claim covered by insurance for which indemnification is
sought pursuant to Article 17.1 and each Indemnitee will cooperate with LESSEE
or its insurers with respect thereto. If LESSEE or its insurers are retaining
attorneys to handle such claim, such counsel must be reasonably satisfactory to
LESSOR.
17.9 Survival of Obligation. Notwithstanding anything in this Lease
to the contrary, the provisions of this Article 17 will survive the Termination
Date and continue in full force and effect notwithstanding any breach by LESSOR
(except in the case where LESSOR's breach of this Lease is the cause of such
Expense) or LESSEE of the terms of this Lease, the termination of the lease of
the Aircraft to LESSEE under this Lease or the repudiation by LESSOR (except
where such repudiation by LESSOR constitutes a breach by LESSOR under this Lease
and is the cause of such Expense) or LESSEE of this Lease.
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ARTICLE 18 INSURANCE
---------- ---------
18.1 Categories of Insurance. Throughout the Lease Term and until
the Termination Date LESSEE will, at its own expense, effect and maintain in
full force and effect the insurance described in Exhibit C through such brokers
and with such insurers as may be approved by LESSOR, such approval not to be
unreasonably withheld, in London or New York or such other insurance markets as
mutually agreed upon by the parties it being understood that, as of the date
hereof, LESSEE's broker is Xxxxx & XxXxxxxx and such broker is satisfactory to
LESSOR.
18.2 Insurance for Indemnities. The liability insurance referred to
in Article 18.1 will in each case include and insure (to the extent of the risks
covered by the policies) the indemnity provisions of Article 17 and LESSEE will
maintain liability insurance of the indemnities for a minimum of two (2) years
following the Termination Date.
18.3 Renewal. Not less than five (5) Business Days before the
expiration or termination date of any insurance required hereunder, LESSEE will
provide LESSOR with telex or fax confirmation from LESSEE's insurance brokers
that renewed certificates of insurance evidencing the renewal or replacement of
such insurance and complying with Exhibit C will be issued on the termination
date of the prior certificate. Within seven (7) days after such renewal, LESSEE
will furnish its brokers' certificates of insurance to LESSOR.
18.4 Assignment of Rights by LESSOR. If LESSOR assigns all or any
of its rights under this Lease as permitted by this Lease or otherwise disposes
of any interest in the Aircraft to any other Person, LESSEE will, upon request,
procure that such Person hereunder be substituted as loss payee and/or added as
additional assured in the policies effected hereunder and enjoy the same rights
and insurance enjoyed by LESSOR under such policies. LESSOR will nevertheless
continue to be covered by such liability policies for 2 years.
18.5 Deductibles. If there is a material adverse change in the
financial condition of LESSEE which LESSOR reasonably believes will prevent
LESSEE from paying the deductible upon the occurrence of a partial loss of the
Aircraft or an Engine, then LESSOR may require LESSEE at LESSEE's expense to
lower its deductibles on the insurance maintained hereunder to a level which is
available on commercially reasonable terms in the insurance market.
18.6 Other Insurance. LESSOR may from time to time by notice to
LESSEE require LESSEE at LESSEE's expense to effect such other insurance or such
variations to the terms of the existing insurance as may then be customary in
the airline
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industry for aircraft of the same type as the Aircraft and at the time commonly
available in the insurance market.
18.7 Information. LESSEE will provide LESSOR with any information
reasonably requested by LESSOR from time to time concerning the insurance
maintained with respect to the Aircraft or in connection with any claim being
made or proposed to be made thereunder.
18.8 Currency. All proceeds of insurance pursuant to this Lease
will be payable in Dollars except as may be otherwise agreed by LESSOR.
18.9 Grounding of Aircraft. If at any time any of the insurance
required pursuant to this Lease will cease to be in full force and effect,
LESSEE will forthwith ground the Aircraft and keep the Aircraft grounded until
such time as such insurance is in full force and effect again.
18.10 Failure to Insure. If at any time LESSEE fails to maintain
insurance in compliance with this Article 18, LESSOR will be entitled but not
bound to do any of the following (without prejudice to any other rights which it
may have under this Lease by reason of such failure):
(a) To pay any premiums due or to effect or maintain
insurance satisfactory to LESSOR or otherwise remedy such
failure in such manner as LESSOR considers appropriate (and
LESSEE will upon demand reimburse LESSOR in full for any
amount so expended in that connection).
(b) At any time while such failure is continuing, to
require the Aircraft to remain at any airport or (as the case
may be), proceed to and remain at any airport designated by
LESSOR in the continental U.S., until such failure is remedied
to LESSOR's satisfaction.
18.11 Reinsurance. Any reinsurance will be maintained with
reinsurers and brokers approved by LESSOR. Such reinsurance will contain each of
the following terms and will in all other respects (including amount) be
satisfactory to LESSOR:
(a) The same terms as the original insurance.
(b) A cut-through and assignment clause satisfactory to
LESSOR.
(c) Payment will be made notwithstanding (i) any
bankruptcy, insolvency, liquidation or dissolution of any of
the original insurers and/or (ii) that the original insurers
have made no payment under the original insurance policies.
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18.12 Limit on Hull in favor of LESSEE. LESSEE may carry hull all
risks or hull war and allied perils on the Aircraft in excess of the Agreed
Value (which is payable to LESSOR) only to the extent such excess insurance
which would be payable to LESSEE in the event of a Total Loss does not exceed
ten percent (10%) of the Agreed Value and only to the extent that such
additional insurance will not prejudice the insurances required herein or the
recovery by LESSOR thereunder. LESSEE agrees that it will not create or permit
to exist any liens or encumbrances over the insurances, or its interest therein,
except as constituted by this Lease.
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ARTICLE 19 LOSS, DAMAGE AND REQUISITION
---------- ----------------------------
Throughout the Lease Term and until the Termination Date,
LESSEE will bear all risk of loss, theft, damage and destruction to the
Aircraft.
19.1 Definitions. In this Article 19:
"Agreed Value" means Twenty Three Million Five Hundred
Thousand U.S. Dollars (US$ 23,500,000) during the first five (5) years of the
Term and Twenty Million U.S. Dollars (US$ 20,000,000) thereafter.
"Net Total Loss Proceeds" means the Total Loss Proceeds
actually received by LESSOR following a Total Loss, less any reasonable legal
and other out-of-pocket expenses, taxes other than LESSOR's income taxes, or
duties incurred by LESSOR in connection with the collection of such proceeds as
reasonably documented by LESSOR.
"Total Loss" means any of the following occurring during the
Term in relation to the Aircraft, Airframe or any Engine and "Total Loss Date"
means the date set forth in parenthesis after each Total Loss:
(a) Destruction, damage beyond repair or being rendered
permanently unfit for normal use for any reason (the date such
event occurs or, if not known, the date on which the Aircraft,
Airframe or Engine was last heard of).
(b) Actual, constructive, compromised, arranged or agreed
total loss (the earlier of the date on which the loss is
agreed or compromised by the insurers or sixty (60) days after
the date of notice to LESSEE's brokers or insurers claiming
such total loss).
(c) Requisition of title, confiscation, forfeiture or any
compulsory acquisition or other similar event by any
governmental entity (the date on which the same takes effect).
(d) Sequestration, detention, seizure or any similar
event for more than thirty (30) consecutive days (the earlier
of the date on which insurers make payment on the basis of a
total loss or the date of expiration of such period).
(e) Requisition for use other than by government of U.S.
for more than one hundred and eighty (180) consecutive days
(the earlier of the date on which the insurers make payment on
the basis of a total loss or the date of expiration of such
period).
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(f) In the case of an Engine, the event described in
Article 12.5.3 (the date on which the same takes effect).
(g) Any other occurrence not permitted under this Lease
which deprives LESSEE of use or possession for a period of
sixty (60) consecutive days or longer, other than as the
result of a breach of LESSOR's covenant of quiet enjoyment
(the sixtieth (60th) day of such period).
"Total Loss Proceeds" means the proceeds of any insurance or
any compensation or similar payment arising in respect of a Total Loss.
19.2 Notice of Total Loss. LESSEE will notify LESSOR within two (2)
Business Days and follow up with written notice within five (5) days after a
Total Loss Date of the Aircraft, Airframe or any Engine.
19.3 Total Loss of Aircraft or Airframe. If the Total Loss of the
Aircraft or Airframe occurs during the Lease Term, the following will occur:
(a) After the Total Loss Date and until receipt by LESSOR
of the Agreed Value as set forth in Exhibit C and all other
amounts then due under this Lease, LESSEE will continue to pay
Rent and the parties will perform all of their other
obligations under this Lease.
(b) On the date which is the earlier of the following
dates:
(1) the date on which the Total Loss Proceeds of
the Aircraft or the Airframe are paid by LESSEE's
insurance underwriters or brokers and
(2) the date which falls forty-five (45) days,
or in the case of (c) or (d) of 19.1, one hundred
twenty (120) days, after the Total Loss Date,
LESSEE will pay to LESSOR an amount equal to the sum of:
(3) the Agreed Value and
(4) all other amounts then due and payable under
this Lease other than Reserves for hours which have
not been flown,
less an amount equal to the Net Total Loss Proceeds received
by LESSOR.
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(c) LESSOR will apply the Net Total Loss Proceeds and any
amounts received from LESSEE pursuant to this Article 19.3(b)
as follows:
(1) first, in discharge of any unpaid Rent and
any other amounts other than Reserves then due and
payable up to the date of LESSOR's receipt of the
Agreed Value;
(2) second, in discharge of the Agreed Value
together with interest thereon calculated at the
Default Rate for any period from the due date set
forth in Article 19.3(b) up to the date of discharge;
and
(3) third, payment of the balance, if any, to
LESSEE.
(d) Upon receipt by LESSOR of all moneys payable by
LESSEE in Article 19.3, LESSOR will refund any prepaid Rent in
respect of the period following the date on which all such
moneys are paid and this Lease will terminate except for
LESSEE's obligations under Articles 10.5, 16 and 17 which
survive the Termination Date and except for LESSOR's
obligation to return the Security Deposit and a portion of the
Reserves to LESSEE as set forth in Articles 13.6 and 19.8.
FOR AVOIDANCE OF DOUBT, THE AGREED VALUE OF THE AIRCRAFT WILL BE PAYABLE TO
LESSOR PURSUANT TO THIS ARTICLE 19.3 WHEN A TOTAL LOSS OF THE AIRFRAME OCCURS
EVEN IF THERE HAS NOT BEEN A TOTAL LOSS OF AN ENGINE OR ENGINES.
19.4 Surviving Engine(s). If a Total Loss of the Airframe occurs
and there has not been a Total Loss of an Engine or Engines, then (subject to
agreement of relevant insurers), on receipt of all monies due under Article 19.3
LESSOR will transfer all its right, title and interest in the surviving
Engine(s) to LESSEE, but without any responsibility, condition or warranty on
the part of LESSOR other than as to freedom from any LESSOR's Lien.
19.5 Total Loss of Engine and not Airframe.
19.5.1 Upon a Total Loss of any Engine not installed on the Airframe
or a Total Loss of an Engine installed on the Airframe not
involving a Total Loss of the Airframe, LESSEE will give
LESSOR prompt written notice thereof. LESSEE will replace such
Engine as soon as reasonably possible by duly conveying to
LESSOR title to another engine (i) free and clear of all
Security Interests (except Permitted Liens) of any kind or
description, (ii) in airworthy condition and of the same or
improved model, service bulletin, modification status and AD
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compliance status and in the same or better operating
condition as the Engine which sustained a Total Loss
(immediately prior to the Total Loss) and having a value and
utility at least equal to the Engine that sustained the Total
Loss, taking into account time in service, hours and cycles
since new and hours and cycles available to the next
inspection, Overhaul or scheduled or anticipated removal
thereof. Such replacement engine will be an Engine as defined
herein and the Engine which sustained such Total Loss will
cease to be an Engine and LESSOR will transfer all its right,
title and interest in the replaced Engine(s) to LESSEE, but
without any responsibility, condition or warranty on the part
of LESSOR other than as to freedom from any LESSOR's Lien.
19.5.2 LESSEE agrees at its own expense to take such action as LESSOR
may reasonably request in order that any such replacement
Engine becomes the property of LESSOR and is leased hereunder
on the same terms as the destroyed Engine. LESSEE's obligation
to pay Rent will continue in full force and effect, but an
amount equal to the Net Total Loss Proceeds received by LESSOR
with respect to such destroyed Engine will, subject to
LESSOR's right to deduct therefrom any amounts then due and
payable by LESSEE under this Lease, be paid to LESSEE.
19.6 Other Loss or Damage.
19.6.1 If the Aircraft or any part thereof suffers loss or damage
during the Term not constituting a Total Loss of the Aircraft
or the Airframe or any Engine, all the obligations of LESSEE
and LESSOR under this Lease (including payment of Rent) will
continue in full force.
19.6.2 In the event of any loss or damage to the Aircraft or Airframe
that does not constitute a Total Loss of the Aircraft or the
Airframe, or any loss or damage to an Engine that does not
constitute a Total Loss of such Engine, LESSEE will at its
sole cost and expense fully repair the Aircraft or Engine in
order that the Aircraft or Engine is placed in an airworthy
condition and substantially the same condition as it was prior
to such loss or damage. All repairs will be performed in a
manner that preserves and maintains all warranties and service
life policies to the same extent as they existed prior to such
loss or damage. LESSEE will notify LESSOR forthwith of any
loss, theft or damage to the Aircraft for which the cost of
repairs is estimated to exceed Four Hundred Thousand U.S.
Dollars (US$ 400,000), together with LESSEE's proposal for
carrying out the repair. In the event that LESSOR does not
agree with LESSEE's proposals for repair, LESSOR
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will so notify LESSEE within two (2) Business Days after its
receipt of such proposal. LESSEE and LESSOR will then consult
with Manufacturer and LESSEE and LESSOR agree to accept as
conclusive, and be bound by, Manufacturer's directions or
recommendations as to the manner in which to carry out such
repairs. If Manufacturer declines to give directions or
recommendations, LESSEE will carry out the repairs in
accordance with the FAA approved directions of LESSOR at an
FAA approved repair facility.
19.6.3 To the extent insurance proceeds received by LESSEE directly
from its insurers under the hull policy do not cover the cost
of such repair work on the Aircraft or Engine and LESSOR has
received additional insurance proceeds from LESSEE's insurers
with respect to such repair work, LESSOR will (subject to
LESSOR's right to deduct therefrom any amounts then due and
payable by LESSEE under this Lease and submission by LESSEE of
reasonable documentation in support of such excess repair
costs) pay to LESSEE insurance proceeds received by LESSOR as
and when such repair work is performed on the Aircraft.
19.7 Government Requisition. If the Aircraft, Airframe or any
Engine is requisitioned for use by any Government Entity and such requisition
does not constitute a Total Loss, LESSEE will promptly notify LESSOR of such
requisition. All of LESSEE's obligations hereunder will continue as if such
requisition had not occurred. So long as no Default has occurred and is
continuing, all payments received by LESSOR or LESSEE from such Government
Entity will be paid over to or retained by LESSEE. if a Default has occurred and
is continuing, all payments received by LESSEE or LESSOR from such Government
Entity shall be used by LESSOR to satisfy any obligations owing by LESSEE.
19.8 Division of Reserves. For avoidance of doubt, the parties
agree that upon the Total Loss of the Aircraft LESSOR will pay to LESSEE
one-half of all Airframe and Engine Reserves paid by LESSEE and not previously
reimbursed or the subject of previous proper invoices submitted by LESSEE to
LESSOR pursuant to Article 13.3.
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ARTICLE 20 REPRESENTATIONS, WARRANTIES AND
---------- COVENANTS OF LESSEE
-------------------------------
20.1 Representations and Warranties. LESSEE represents and warrants
the following to LESSOR as of the date of execution of this Lease and as of the
Delivery Date:
20.1.1 Corporate Status. LESSEE is a corporation duly incorporated,
validly existing and in good standing under the Laws of
Delaware. It has the corporate power and authority to carry on
its business as presently conducted and to perform its
obligations hereunder.
20.1.2 Governmental Approvals. No authorization, approval, consent,
license or order of, or registration with, or the giving of
notice to the Aviation Authority or any other Government
Entity is required for the valid authorization, execution,
delivery and performance by LESSEE of this Lease, except as
will have been duly effected as of the Delivery Date.
20.1.3 Binding. LESSEE's Board of Directors has authorized LESSEE to
enter into this Lease, any Side Letters hereto and any other
documentation in connection with the leasing of the Aircraft
from LESSOR (collectively, the "Operative Documents") and
perform its obligations under the Operative Documents. This
Lease and the other Operative Documents have been duly
executed and delivered by LESSEE and represent the valid,
enforceable and binding obligations of LESSEE except as may be
limited by bankruptcy, insolvency, reorganization or other
Laws of general application affecting the enforcement of
creditors' rights. When executed by LESSEE at Delivery, the
same will apply to the Estoppel and Acceptance Certificate.
20.1.4 No Breach. The execution and delivery of the Operative
Documents, the consummation by LESSEE of the transactions
contemplated herein and compliance by LESSEE with the terms
and provisions hereof do not and will not contravene any Law
applicable to LESSEE, or result in any breach of or constitute
any default under or result in the creation of any Security
Interest upon any property of LESSEE, pursuant to any
indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, bank loan or credit agreement,
corporate charter, by-law or other agreement or instrument to
which LESSEE is a party or by which LESSEE or its properties
or assets may be bound or affected. When executed by LESSEE at
Delivery, the same will apply to the Estoppel and Acceptance
Certificate.
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20.1.5 Filings. Except for any filing or recording that may be
required under the U.S. Federal Aviation Administration no
filing or recording of any instrument or document (including
the filing of any financing statement) is necessary under the
Laws of the State of Registration and Colorado in order for
this Lease to constitute a valid lease of record relating to
the Aircraft.
20.1.6 Licenses. LESSEE holds all licenses, certificates and permits
from applicable Government Entities in the U.S. for the
conduct of its business as a certificated air carrier and
performance of its obligations under this Lease.
20.1.7 No Suits. There are no suits, arbitrations or other
proceedings pending or threatened against LESSEE before any
court or administrative agency against or affecting LESSEE
which, if adversely determined, would have a material adverse
effect on the business, assets or condition (financial or
otherwise) of LESSEE or its ability to perform under this
Lease, except as described in the filings provided to LESSOR
pursuant to Article 22.
20.1.8 General Obligations. The obligations of LESSEE under this
Lease are direct, general and unconditional obligations of
LESSEE and rank or will rank at least pari passu in right of
payment with all other present ---- ----- and future unsecured
and unsubordinated obligations (including contingent
obligations) of LESSEE, with the exception of such obligations
as are mandatorily preferred by law and not by reason of any
encumbrance.
20.1.9 Tax Returns. All necessary returns have been delivered by
LESSEE to all relevant taxation authorities in the
jurisdiction of its incorporation or extensions have been
obtained as required, and LESSEE is not in default in the
payment of any taxes shown to be payable thereon.
20.1.10 No Material Adverse Effect. LESSEE is not in default under any
agreement to which it is a party or by which it may be bound
which would have a material adverse effect on its ability to
perform its obligation hereunder.
20.1.11 No Default under this Lease. At the time of execution of this
Lease, no Default has occurred and is continuing and the
financial statements provided to LESSOR fairly present the
financial condition of LESSEE.
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20.1.12 Shareholder Equity. At the time of execution of this Lease,
LESSEE has common shareholder equity in an amount of at least
Fifty Million U.S. Dollars (US$ 50,000,000).
20.2 Covenants. LESSEE covenants to LESSOR that it will comply with
the following throughout the entire Lease Term:
20.2.1 Restrictions on Mergers. LESSEE will not sell or convey
substantially all of its property and assets or merge or
consolidate with or into any other corporation unless LESSEE
has obtained LESSOR's prior written consent which will not be
unreasonably withheld or, unless the surviving entity has a
net worth after the merger or consolidation that is at least
equal to that of LESSEE immediately prior to the merger or
consolidation.
20.2.2 No Security Interests. LESSEE will not create or agree to or
permit to arise any Security Interest (other than Permitted
Liens) on or with respect to the Aircraft, title thereto or
any interest therein. LESSEE will forthwith, at its own
expense, take all action as may be necessary to discharge or
remove any such Security Interest if it exists at any time.
20.2.3 Representations to Other Parties. LESSEE will not represent or
hold out LESSOR as carrying goods or passengers on the
Aircraft or as being in any way connected or associated with
any operation of the Aircraft so long as LESSOR is, in fact,
not in any way so connected or associated.
20.2.4 Shareholder Equity. During the Lease Term, LESSEE will
maintain common shareholder equity in an amount of at least
Fifty Million U.S. Dollars (US$ 50,000,000), provided that in
the event that LESSEE is not able to comply with this
covenant, LESSEE will within fourteen (14) days following
receipt of LESSOR's request therefor, provide to LESSOR an
additional cash security deposit in an amount to be reasonably
determined by LESSOR at such time.
20.2.5 LESSEE's Fleet. During the Lease Term, LESSEE will not operate
aircraft of any type other than Boeing 737 CFM- powered Stage
III aircraft, without LESSOR's prior written consent which
consent shall not be unreasonably withheld.
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ARTICLE 21 REPRESENTATIONS, WARRANTIES AND
---------- COVENANTS OF LESSOR
-------------------------------
21.1 Representations and Warranties. LESSOR represents and warrants
the following to LESSEE as of the date of execution of the Lease and as of the
Delivery Date and ALL OTHER WARRANTIES, EXPRESS OR IMPLIED HAVE BEEN WAIVED IN
ACCORDANCE WITH ARTICLE 8:
21.1.1 Corporate Status. LESSOR is a corporation duly incorporated,
validly existing and in good standing under the Laws of the
State of California. It has the corporate power and authority
to carry on its business as presently conducted and to perform
its obligations hereunder.
21.1.2 Governmental Approvals. No authorization, approval, consent,
license or order of, or registration with, or the giving of
notice to the Aviation Authority or any Government Entity or
any other Person is required for the valid authorization,
execution, delivery and performance by LESSOR of this Lease.
21.1.3 Binding. This Lease and the other Operative Documents have
been duly authorized, executed and delivered by LESSOR and
represent the valid, enforceable and binding obligations of
LESSOR except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other Laws of general
application affecting the enforcement of creditors' rights.
21.1.4 No Breach. The execution and delivery of the Operative
Documents, the consummation by LESSOR of the transactions
contemplated herein and compliance by LESSOR with the terms
and provisions hereof do not and will not contravene any Law
applicable to LESSOR, or result in any breach of or constitute
any default under any indenture, mortgage, chattel mortgage,
deed of trust, conditional sales contract, bank loan or credit
agreement, corporate charter, by-law or other agreement or
instrument to which LESSOR is a party or by which LESSOR or
its properties or assets may be bound or affected.
21.1.5 Title to Aircraft. On the Delivery Date and at all times
thereafter during the Term (subject to Article 24) LESSOR will
have good and valid title to the Aircraft.
21.2 Covenants. LESSOR covenants to LESSEE that it will comply with
the following throughout the entire Lease Term:
21.2.1 Quiet Enjoyment. So long as no Event of Default has occurred
and is continuing hereunder, LESSOR covenants that neither
LESSOR nor any person lawfully claiming
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through LESSOR will interfere with LESSEE's quiet, peaceful
and undisturbed use and enjoyment of the Aircraft, except as
otherwise permitted under this Lease.
21.2.2 Registration Requirements. At all times during the Lease Term,
LESSOR shall satisfy all requirements applicable to it in
order to maintain in effect the registration of the Aircraft
in the United States. LESSOR shall not take any act or omit to
take any act that is required to be performed by it in order
to ensure the continuous registration of the Aircraft in the
United States.
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ARTICLE 22 FINANCIAL AND RELATED INFORMATION
---------- ---------------------------------
LESSEE agrees to furnish each of the following to LESSOR
during the Term:
(a) Within forty-five (45) days after the end of each
fiscal quarter of LESSEE, or sixty (60) days if U.S.
Securities and Exchange Commission (SEC) rules permit, three
(3) copies of the 10Q, or if LESSEE is not a reporting
company, unaudited consolidated financial statements
(including a balance sheet and profit and loss statement)
prepared for such quarter in accordance with generally
accepted accounting principles in the U.S.
(b) Within ninety (90) days after the end of each fiscal
year of LESSEE, or one hundred twenty (120) days if SEC rules
permit, three (3) copies of the 10K, or if LESSEE is not a
reporting company, audited consolidated financial statements
(including a balance sheet and profit and loss statement)
prepared as of the close of such fiscal year in accordance
with generally accepted accounting principles in the U.S.
LESSEE's chief financial officer will also provide a
certificate stating that no Default exists under this Lease
and that such officer has examined the Creditor Agreements
between LESSEE and the other Creditors for aircraft that
entered LESSEE's fleet during LESSEE's previous fiscal year
and none of such Creditor Agreements contains terms which
provide or contemplate that such Creditors will obtain any
right, title or interest in an Engine which is installed on
another aircraft (or, if this is not the case, such officer
will identify in the certificate the parties, the aircraft and
the Creditor Agreements for which this statement is untrue).
(c) Promptly after distribution, three (3) copies of all
reports and financial statements which LESSEE sends or makes
available to its stockholders or creditors.
(d) From time to time, such other reasonable information
as LESSOR may reasonably request concerning the location,
condition, use and operation of the Aircraft or the financial
condition of LESSEE and not previously delivered by LESSEE.
22.1 Information about Suits. LESSEE will promptly give to LESSOR a
notice in writing of any suit, arbitration or proceeding before any court,
administrative agency or Government Entity which, if adversely determined, would
have a material adverse effect on the business, assets or condition (financial
or otherwise), of LESSEE or its ability to perform under this Lease.
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ARTICLE 23 RETURN OF AIRCRAFT
---------- ------------------
23.1 Date of Return. LESSEE is obligated to return the Aircraft,
Engines, Parts and Aircraft Documentation to LESSOR in accordance with Article
23 on the Termination Date, unless a Total Loss of the Aircraft has occurred, or
this Lease was terminated prior to Delivery, in accordance with Articles 3.5 or
3.6. If an Event of Default occurs prior to the Expiration Date and LESSOR
repossesses the Aircraft, the return requirements set forth in this Article 23
nonetheless must be met on the date the Aircraft is actually returned to LESSOR
or repossessed by LESSOR.
23.2 Technical Reporting. Six (6) months prior to the Expiration
Date at LESSOR's request, LESSEE will provide LESSOR with a technical report in
the form and substance of Exhibit L, as revised, and, in addition upon LESSOR's
request, will make copies available of (i) drawings of the interior
configuration of the Aircraft both as it presently exists and as it will exist
at return (ii) airworthiness directive compliance status report, (iii) service
bulletin incorporation list, (iv) hard time and life limited component inventory
and status report, (v) on- condition and condition monitored component inventory
and status report, (vi) a list of LESSEE-initiated modifications and
alterations, (vii) interior material FAR 25.853 conformance certificates, (viii)
Aircraft maintenance program, (ix) complete workscope for the checks,
inspections and other work to be performed prior to return, (x) current Engine
disk sheets trend monitoring reports and (xi) any other data which is reasonably
requested by LESSOR.
23.3 Return Location. LESSEE at its expense will return the
Aircraft, Engines, Parts and Aircraft Documentation to LESSOR at LESSEE's FAA
approved maintenance provider's facility in the continental U.S. or to such
other airport as may be mutually agreed to by LESSEE and LESSOR.
23.4 Aircraft Documentation Review. For the period commencing at
least ten (10) Business Days prior to the proposed redelivery date and
continuing until the date on which the Aircraft is accepted by LESSOR, LESSEE
will provide for the review by LESSOR and/or its representative of all of the
Aircraft Documentation described in Exhibit K in one central location at the
Aircraft return location.
23.5 Aircraft Inspection.
23.5.1 Lessor may observe the maintenance checks performed
immediately prior to the proposed redelivery. At redelivery,
LESSOR and/or its representatives will have an opportunity to
conduct a full systems functional and operational inspection
of the Aircraft (and other types of reasonable inspections
based upon the Aircraft type, age, use and other known factors
with respect to the
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Aircraft) and a full inspection of the Aircraft Documentation
(including records and manuals), all to LESSOR's satisfaction.
Any deficiencies from the Aircraft return condition
requirements set forth in this Article 23 will be corrected by
LESSEE at its cost prior to the acceptance flight described in
Article 23.5.2.
23.5.2 Immediately prior to the proposed redelivery of the Aircraft,
LESSEE will carry out for LESSOR and/or LESSOR's
representatives an Aircraft acceptance flight in accordance
with Manufacturer's standard flight operation check flight
procedures or, if agreed to in writing by LESSOR, in
accordance with an airline acceptance flight procedure, either
of which will be for the duration necessary to perform such
check flight procedures but in any event not less than two (2)
hours. Flight costs and fuel will be furnished by and at the
expense of LESSEE. Any deficiencies from the Aircraft return
condition requirements set forth in this Article 23 will be
corrected by LESSEE at its cost prior to return of the
Aircraft.
23.5.3 To the extent that the ground inspection and acceptance flight
extend beyond the Expiration Date, unless such delay is solely
the result of LESSOR's breach of its obligations under this
Lease, the Lease Term will be deemed to have been
automatically extended and the obligations of LESSEE hereunder
(including Article 23.10(c)) will continue on a day-to-day
basis until LESSOR delivers to LESSEE the Return Acceptance
Receipt.
23.5.4 LESSEE agrees to indemnify and hold harmless LESSOR, its
officers, directors, employees, agents and representatives
from and against all Expenses for injury to or death of any
person (other than LESSOR's employees) or damage to any
property (including the Aircraft) arising out of or in any way
connected with such ground inspection and acceptance flight
unless caused by the willful misconduct of such parties.
23.6 Certificate of Airworthiness Matters.
23.6.1 The Aircraft at return shall have a U.S. Standard Certificate
of Airworthiness for transport category aircraft issued by the
FAA in accordance with FAR Part 21 and, in addition, meet the
operating requirements of FAR Part 121.
23.6.2 If the Aircraft is to be registered in a country other than in
the U.S. after return from LESSEE, LESSOR may in its sole
discretion waive the requirements of Article 23.6.1 and
instead require that LESSEE at its
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expense (to the extent such expense is no greater than that
which LESSEE would have incurred pursuant to Article 23.6.1
with any additional expenses being for LESSOR's account and
with the agreement that no Rent will accrue during the delay
caused by such LESSOR request) put the Aircraft in a condition
to meet the requirements for issuance of a Certificate of
Airworthiness of the Aviation Authority of such country.
Lessor will provide the workscope for such work.
23.7 General Condition of Aircraft at Return.
23.7.1 The Aircraft, Engines and Parts will, during the Lease Term,
have been maintained and repaired in accordance with the
Maintenance Program, the rules and regulations of the FAA and
this Lease.
23.7.2 Aircraft Documentation (including records and manuals) will
have been maintained in an up-to-date status, in accordance
with the rules and regulations of the FAA and will be in a
form necessary in order to meet the requirements of Article
23.6.1. The records and historical documents set forth in
Attachment 1 of Exhibit I generated by LESSEE will be in
English, it being agreed that LESSEE is not responsible for
translating any documents that were delivered by LESSOR in a
language other than English.
23.7.3 The Aircraft will be in the same working order and condition
as at Delivery (subject to the other provisions of this
Article 23, reasonable wear and tear from normal flight
operations excepted), with all pilot discrepancies, minimum
equipment list (XXX) and deferred maintenance items cleared on
a terminating action basis.
23.7.4 The Aircraft will be airworthy (conform to its type design and
be in a condition for safe operation), with all Aircraft
equipment, Parts, components and systems operating within
limits approved by Manufacturer, and FAA.
23.7.5 The Aircraft interior (including flight deck, passenger cabin
and windows) and exterior (including cargo compartments) will
be clean and cosmetically acceptable to LESSOR, with all
compartments free of foreign objects, dirt, grease, fluids,
stains, grime, cracks, tears and rips and ready to be placed
into immediate commercial airline passenger operations. All
interior placards, signs and markings will be properly
attached, free from damage, clean and legible.
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23.7.6 No special or unique Manufacturer, Engine manufacturer or
Aviation Authority inspection or check requirements which are
specific to the Aircraft or Engines (as opposed to all
aircraft or engines of their types) will exist with respect to
the Airframe, Engines and Aircraft equipment, Parts,
components and systems.
23.7.7 All repairs, modifications and alterations to the Aircraft
effected by LESSEE or any of its sublessees will have been
accomplished in accordance with Manufacturer's Structural
Repair Manual (or FAA- approved data supported by FAA Form
8110-3 and FAA Form 337).
23.7.8 The Aircraft will be returned with the Engines installed and
with the same equipment as at Delivery, subject only to those
replacements, additions and Modifications permitted under this
Lease.
23.7.9 All airworthiness directives and other instructions of the
Aviation Authority and FAA applicable to the Aircraft which
are issued prior to the date of return of the Aircraft and
require compliance (either by means of repetitive inspections,
modifications or terminating action) prior to return of the
Aircraft to LESSOR will have been complied with on the
Aircraft on a terminating action basis. Any airworthiness
directives of the Aviation Authority or FAA which must be
completed within one (1) year after the Termination Date must
also be performed on a terminating action basis by LESSEE at
LESSEE's cost. Airworthiness directives and instructions which
do not have a terminating action will be accomplished at the
highest level of inspection or modification possible. If,
after using best efforts, LESSEE is unable to acquire the
material, parts or components necessary to accomplish such
airworthiness directive, LESSEE will pay to LESSOR upon return
of the Aircraft the estimated cost of terminating such
airworthiness directive. If the estimated cost cannot be
mutually agreed upon by LESSEE and LESSOR, LESSEE and LESSOR
will each obtain an estimate from a reputable FAA approved
maintenance facility and the estimated cost will be the
average of the two estimates.
23.7.10 The Aircraft will be in compliance with Manufacturer's
Corrosion Prevention and Control Program (CPCP) specified for
the model type by Manufacturer.
23.7.11 If any waivers, alternate means of compliance, dispensations,
extensions or carry-overs with respect to airworthiness
directives or operating or maintenance requirements are
granted by the Aviation Authority or permitted by the
Maintenance Program, LESSEE at its
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sole cost and expense will nonetheless perform such
airworthiness directives and other operating or maintenance
requirements on a terminating action basis as if such waivers,
alternate means of compliance, dispensations or extensions did
not exist.
23.7.12 The Aircraft will be free from any Security Interest except
Permitted Liens.
23.7.13 All no-charge vendor and Manufacturer's service bulletin kits
received by LESSEE for the Aircraft but not installed thereon
will be on board the Aircraft as cargo. At LESSOR's request,
any other service bulletin kit that LESSEE has paid, or will
pay, for will also be delivered to LESSOR on board the
Aircraft, but LESSOR will reimburse LESSEE for its actual
out-of-pocket costs for such kit, unless LESSEE purchased such
kit as part of its implementation of a service bulletin on its
fleet of aircraft of the same type of the Aircraft but had not
yet installed such kit on the Aircraft, in which case such kit
will be furnished free of charge to LESSOR.
23.7.14 The Aircraft will be free of any system-related leaks and any
damage resulting therefrom. All repairs will have been
performed on a permanent basis in accordance with the
applicable manufacturer's instructions.
23.7.15 The Aircraft fluid reservoirs (including oil, oxygen,
hydraulic and water) will be serviced to full and the waste
tank freshly serviced in accordance with Manufacturer's
instructions. Each fuel tank will be at least as full as at
Delivery.
23.7.16 All fuel tanks will have recently undergone an anti-
fungus/biological growth contamination laboratory evaluation,
with appropriate correction taken in the event that excessive
levels of contamination are identified.
23.7.17 At LESSOR's request, LESSEE will provide LESSOR with a written
summary of the results of all maintenance and inspection
sampling programs involving or affecting the Aircraft and the
rest of its 737-300 aircraft fleet.
23.8 Checks Prior to Return. Immediately prior to return of the
Aircraft to LESSOR, LESSEE at its expense will do each of the
following:
(a) Have performed, by an FAA-approved repair station,
the next full and complete zonal, systems, corrosion and
structural "C" check and any other tasks listed in the MPD and
scheduled for completion at such date including all lesser and
corresponding Flight Hour,
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Cycle and calendar controlled maintenance and inspection
tasks, all in accordance with the MPD, sufficient to clear the
Aircraft for 3,200 Flight Hours or Cycles of operation or
until its next scheduled full and complete "C" check interval
in accordance with the MPD (whichever is greater) (which in
any event will not be less than one year). LESSEE will also
weigh the Aircraft, revise the weight and balance equipment
list records and compute new weight and balance data. Any
discrepancies revealed during such inspection will be
corrected in accordance with Manufacturer's maintenance and
repair manuals or FAA-approved data. So long as the same does
not require any additional downtime, LESSEE agrees to perform
during such check any other work reasonably required by LESSOR
(and not otherwise required under this Lease) and LESSOR will
reimburse LESSEE for LESSEE's actual cost of such work, or if
such work is performed by LESSEE, LESSOR will reimburse LESSEE
at LESSEE's preferred customer rates, in either case within
ten (10) days after submission of complete and proper
invoices.
(b) Perform an internal and external corrosion inspection
in accordance with the MPD and correct any discrepancies in
accordance with the recommendations of Manufacturer and the
Structural Repair Manual. In addition, all inspected areas
will be properly treated with corrosion inhibitor as
recommended by Manufacturer.
(c) Remove LESSEE's exterior markings, including all
exterior paint, by stripping (or, at LESSOR's option,
pneumatically scuff/sanding) the paint from the Airframe and
clean, reseal, refinish, prepare (including application of
alodine or another corrosion inhibitor) and prime the surfaces
to be painted, all in accordance with Manufacturer's and paint
manufacturer's recommendations. LESSEE will then repaint the
Airframe white. Such painting will be accomplished in such a
manner as to result in a uniformly smooth and cosmetically
acceptable aerodynamic surface. All external placards, signs
and markings will be properly attached, free from damage,
clean and legible.
(d) If reasonably required by LESSOR repaint the interior
of the Aircraft, including flight deck, and replace placards.
(e) In accordance with Manufacturer's Structural Repair
Manual or FAA-approved data, permanently repair damage to the
Aircraft that exceeds Manufacturer's limits and replace any
non-flush structural patch repairs installed on the Airframe
with flush-type repairs, unless otherwise agreed in writing by
LESSOR.
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LESSEE will not be required to replace any non-flush patches
that were present on the Aircraft at Delivery.
(f) Perform full and complete hot and cold section
videotape borescope on each Engine and its modules in
accordance with the Engine manufacturer's maintenance manual,
with LESSOR or its representatives entitled to be present.
LESSEE will provide documentation to LESSOR's satisfaction
that such inspection does not reveal any condition which would
cause the Engine or any module to be unserviceable, beyond
serviceable limits or serviceable with limitations under the
Engine manufacturer's maintenance manual. LESSEE will correct
any discrepancies in accordance with the guidelines set out by
the Engine manufacturer which may be discovered during such
inspection.
(g) If the Engine or APU historical and technical records
and/or condition trend monitoring data of any Engine or APU
indicate an acceleration in the rate of deterioration in the
performance or a material increase in oil consumption of an
Engine or APU, LESSEE will correct, to LESSOR's satisfaction,
the conditions that are determined to be causing such
accelerated rate of deterioration or material increase in oil
consumption.
(h) In accordance with the applicable maintenance manual,
accomplish a maximum take-off power assurance run and
condition, acceleration and bleed valve scheduling checks on
the Engines. LESSEE will record the results of such checks and
evaluate the Engine performance, with LESSOR and/or its
representative entitled to be present. The performance and all
operating parameters of each Engine will be within the limits
specified in the Manufacturer's maintenance manual.
(i) In the event the Engine historical and technical
records, borescope inspection, trend monitoring and other
checks specified in (f), (g) and (h) above result in a dispute
regarding the conformity of an Engine with the requirements of
this Article 23, LESSEE and LESSOR will consult with Engine
manufacturer and follow Engine manufacturer's recommendations
with regard to determining if such Engine complies with the
requirements of this Article 23 and the manner in which any
discrepancies from the requirements of this Article 23 will be
rectified.
23.9 Part Lives. At return, the condition of the Aircraft will be
as follows:
(a) The Aircraft will have zero (0) hours consumed since
the last full and complete zonal, systems,
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corrosion and structural "C" check (excluding hours consumed
on the acceptance flight) and will not have accumulated more
than 12,800 hours, or four (4) times the then MPD hourly "C"
check interval, since the last full and complete systems,
zonal, corrosion and structural "C7" check as defined in MPD.
(b) (i) Each Part of an Engine which has a hard time
limit will, except as set forth in (ii) below, have at least
fifty percent (50%) of its full allotment of hours/cycles
(whichever is the more limiting) remaining to operate until
its next-scheduled overhaul or removal. In addition, each
Engine will also have at least five thousand (5,000) hours and
five thousand (5,000) cycles remaining until its
next-anticipated full performance restoration shop visit
(based upon the Engine manufacturer's estimated mean time
between removals (MTBR) for engines of the same type as the
Engines). Each Engine will also have a remaining EGT margin
sufficient to permit the operation of such Engine for the
hours and cycles set forth in the preceding sentence, based
upon the historical experience of the Engine manufacturer for
engines of the same type as the Engines. In the event that on
Delivery LESSEE received the Engine or any Part thereof from
LESSOR in a condition less than what is set forth above in
this paragraph, as evidenced on the attachments to the
Estoppel and Acceptance Certificate, it is agreed that LESSEE
will not be required to return such Engine or Part thereof in
a better condition than that in which it was received.
(ii) Each Part of an Engine which has a life limit will
have at least 3,000 cycles remaining to operate until its next
scheduled removal. In addition, the overall average life
remaining on all life limited Parts of an Engine will be no
less than the overall average life remaining on the Parts of
such Engine as they were received at Delivery.
(c) The installed APU will be in serviceable condition
with no more than 2,000 hours accumulated since its last
Overhaul (excluding hours consumed on the acceptance flight).
(d) The installed main and nose landing gear, components
and their associated actuators, side braces and parts (the
"Landing Gear") will have no more hours/cycles/calendar time
consumed since the last Overhaul than at Delivery of the
Aircraft. In the event the installed Landing Gear does not
meet the foregoing condition, LESSEE will be entitled to
return the Landing Gear with a minimum of twenty-five percent
(25%) of the full allotment of hours/cycles/calendar
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time (whichever is the more limiting factor) remaining until
the next overhaul or scheduled removal, provided that LESSEE
will reimburse LESSOR an amount equal to the number of
hours/cycles/calendar time (whichever is the more limiting
factor) consumed on the Landing Gear at return since the last
overhaul in excess of that which existed at Delivery
multiplied by a Landing Gear Overhaul cost per hour calculated
as follows:
such Landing Gear Overhaul cost price per hour will
be the quotient obtained by dividing (i) the expected
cost of the next Landing Gear Overhaul by (ii) the
full allotment of hours between scheduled Overhauls
for such Landing Gear as approved by the MPD. If
LESSEE and LESSOR are unable to agree on the expected
cost of the next scheduled Landing Gear Overhaul,
such cost will be established by taking the average
of the price quotes submitted by two (2) reputable
FAA-approved Landing Gear Overhaul facilities, one
selected by LESSEE and the other selected by LESSOR.
(e) Each component or Part of the Aircraft which has a
hard time (hour/cycle) limit to overhaul pursuant to the MPD
will have the greater of (i) fifty percent (50%) of the full
allotment of hours and cycles, or (ii) the lesser of (1) five
thousand (5,000) hours or cycles (whichever is applicable) or
(2) one hundred percent (100%) of its total approved life, if
its approved life is less than five thousand (5,000) hours or
cycles, remaining to operate until its next scheduled overhaul
pursuant to the MPD. In the event that on Delivery LESSEE
received from LESSOR hard time controlled components or Parts
less than what is set forth above in this paragraph, as
evidenced on the attachments to the Estoppel and Acceptance
Certificate, it is agreed that LESSEE will not be required to
return such hard time controlled components or Parts in better
condition than that in which they were received.
(f) Each life-limited component or Part of the Aircraft
will have the greater of (i) fifty percent (50%) of the full
allotment of hours and cycles, or (ii) the lesser of (1) five
thousand (5,000) hours or cycles or (2) one hundred percent
(100%) of its total approved life remaining to operate
pursuant to the Maintenance Program. In the event that on
Delivery LESSEE received from LESSOR life-limited components
or Parts in a condition less than what is set forth above in
this paragraph, as evidenced on the attachments to the
Estoppel and Acceptance Certificate, it is agreed that LESSEE
will not be required to return such life- limited components
or Parts in better condition than that in which they were
received.
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(g) Each component or Part of the Aircraft that has a
calendar limit (including emergency equipment) will have at
least as much time remaining to operate at the date of return
of the Aircraft to LESSOR as it had at Delivery, pursuant to
the Maintenance Program.
(h) No Engine, installed component or Part will have a
total time since new greater than one hundred ten percent
(110%) of that of the Airframe and, with respect to all
installed components as a group, the components will have an
average total time since new no greater than that of the
Airframe, so long as such condition was met at Delivery.
(i) The Aircraft tires and brakes will be new or in the
same condition as at Delivery.
23.10 LESSEE's Continuing Obligations. In the event that LESSEE does
not return the Aircraft to LESSOR on the Expiration Date in
the condition required by this Article 23 for any reason
(whether or not the reason is within LESSEE's control,
except as provided below):
(a) the obligations of LESSEE under this Lease will
continue in full force and effect on a day-to-day basis until
such return. This will not be considered a waiver of LESSEE's
Event of Default or any right of LESSOR hereunder;
(b) Until such time as the Aircraft is redelivered to
LESSOR and put into the condition required by this Article 23,
instead of paying the Rent specified in Article 5.3, LESSEE
will pay twice the amount of Rent for each day from the
scheduled Expiration Date until the Termination Date (the
monthly Rent payable under Article 5.3.1 will be prorated
based on the actual number of days in the applicable month).
Notwithstanding the foregoing, if the delay is caused solely
by a force majeure, LESSEE will only be required to pay the
normal stated Rent during any such delay and payment will be
made upon presentation of LESSOR's invoice; and if such delay
in return is the direct and sole result of LESSOR's failure to
perform any redelivery inspection and acceptance in a
commercially reasonable manner, LESSEE shall pay no Rent
during such delay;
(c) LESSOR may elect, in its sole and absolute
discretion, to accept the return of the Aircraft prior to the
Aircraft being put in the condition required by this Article
23 and thereafter have any such non- conformance corrected at
such time as LESSOR may deem appropriate (but within ninety
(90) days following the return of the Aircraft) and at
commercial rates then
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charged by the Person selected by LESSOR to perform such
correction. Any direct expenses incurred by LESSOR for such
correction will become additional Rent payable by LESSEE
within fifteen (15) days following the submission of a written
statement by LESSOR to LESSEE, identifying the items corrected
and setting forth the expense of such corrections. LESSEE's
obligation to pay such supplemental Rent will survive the
Termination Date.
23.11 Return Acceptance Certificate. Upon return of the Aircraft in
accordance with the terms of this Lease, LESSOR will prepare and execute two (2)
Return Acceptance Certificates in the form and substance of Exhibit I. In
addition, LESSEE and LESSOR will execute a Lease Termination for filing with the
FAA evidencing termination of this Lease.
23.12 Indemnities and Insurance. The indemnities and insurance
requirements set forth in Articles 17 and 18, respectively, will apply to
Indemnitees and LESSOR's representatives during return of the Aircraft,
including the ground inspection and acceptance flight.
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ARTICLE 24 ASSIGNMENT
---------- ----------
24.1 No Assignment by LESSEE. EXCEPT AS MAY BE SPECIFICALLY
PERMITTED IN THIS LEASE, NO ASSIGNMENT, NOVATION, TRANSFER,
MORTGAGE OR OTHER CHARGE MAY BE MADE BY LESSEE OF ANY OF ITS
RIGHTS WITH RESPECT TO THE AIRCRAFT, ENGINE OR PART OR THIS
LEASE.
24.2 Sale or Assignment by LESSOR.
24.2.1 Subject to LESSEE's rights pursuant to this Lease, LESSOR may
at any time and without LESSEE's consent sell, assign or
transfer its rights and interest hereunder or with respect to
the Aircraft to a third party ("LESSOR's Assignee"). For a
period of two (2) years after such sale or assignment and at
LESSEE's cost, LESSEE will continue to name LESSOR as an
additional insured under the Aviation and Airline General
Third Party Liability Insurance specified in Exhibit C.
24.2.2 Notwithstanding Article 24.2.1 hereof, LESSOR shall not
assign, mortgage, pledge, convey or otherwise transfer any of
its right, title or interest in or to this Lease or the
Aircraft, whether directly or indirectly, through the sale or
other transfer of all or substantially all of its assets or
business, or otherwise, except on the conditions set forth in
this Article 24. LESSOR may transfer to another Person
("Lessor's Assignee") such right, title and interest, subject
to the conditions that:
(a) LESSOR's Assignee shall have full power, authority
and legal right to execute and deliver and to perform all of
the obligations of the LESSOR under this Lease that are being
assigned to it and shall provide reasonably satisfactory
evidence of such power and authority to LESSEE;
(b) LESSOR's Assignee shall enter into one or more legal,
valid, binding and enforceable agreements that (i) is/are in
form suitable for recordation by the FAA (accompanied by an
opinion of counsel addressed to LESSEE to the effect that such
agreement or agreements are legal, valid, binding and
enforceable, subject to a customary exception relating to
insolvency and similar laws), (ii) is/are effective to confirm
that such LESSOR's Assignee agrees to be bound by all of the
terms of, and to undertake all of the obligations of, the
transferring LESSOR, whether or not LESSOR has also
transferred to such LESSOR's Assignee any portion of the
Security Deposit, any Reserves or any other amount paid by
LESSEE hereunder and (iii) contain(s) each of
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the representations and warranties made by the LESSOR herein;
(c) LESSOR's Assignee shall not be an airline which
directly competes with LESSEE;
(d) In connection with any transfer by LESSOR of less
than all of its right, title and interest in this Lease or the
Aircraft (other than a mortgage or other security agreement)
(i) the obligations of LESSOR arising under this Lease shall
become joint and several obligations among LESSOR, the new
LESSOR's Assignee and all other LESSOR's Assignees (if any)
and (ii) notwithstanding the other provisions of this Article
24, LESSEE shall pay to one party, and that party shall
receive on behalf of each LESSOR's Assignee, all payments,
notices and other communications to be provided by LESSEE
hereunder and each LESSOR's Assignee by accepting any such
assignment appoints LESSOR or the appointed representative as
its agent for the purposes of taking any action hereunder;
(e) No assignment, sale, transfer or granting of a
Security Interest by LESSOR hereunder shall impose or increase
any costs or expenses, including any costs related to Taxes,
to which LESSEE would not have been subject absent such
transfer, assignment, sale, or security interest.
24.3 LESSEE Cooperation. On request by LESSOR, LESSEE will execute
all such documents (such as a lease assignment agreement) as
LESSOR may reasonably require to confirm LESSEE's
obligations under this Lease and obtain LESSEE's
acknowledgement that LESSOR is not in breach of the Lease,
if such is the case. LESSEE will provide all other
reasonable assistance and cooperation to LESSOR, LESSOR's
Assignee and LESSOR's Lender in connection with any such
sale or assignment. LESSOR will reimburse LESSEE for its
reasonable out-of-pocket costs, including reasonable legal
fees incurred in reviewing documents required by LESSOR.
24.4 Protections.
24.4.1 Wherever the term "LESSOR" is used in this Lease in relation
to any of the provisions relating to disclaimer, title and
registration, indemnity and insurance contained in Articles 8,
14, 17 and 18, respectively, or with respect to Article
20.2.3, the term "LESSOR" will be deemed to include LESSOR's
Assignee and LESSOR's Lender, if applicable. Provided LESSOR's
assignee meets the requirement of this Article 24, LESSEE will
acknowledge and accept LESSOR's Assignee as the new "LESSOR"
under this Lease and (except in accordance with Article
24.2.2(d)) will look solely to LESSOR's Assignee for the
performance of all
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LESSOR obligations and covenants under this Lease arising on
and after the Aircraft sale date.
24.4.2 In the event that LESSOR advises LESSEE that LESSOR intends to
sell the Aircraft and assign this Lease to a Person who has a
net worth which is less than US$25,000,000, LESSEE shall have
five (5) Business Days to irrevocably commit to purchase the
Aircraft for the price, on the terms and within the time frame
that LESSOR's purchaser has agreed to. If LESSEE does not
irrevocably commit in writing within such five (5) Business
Days to purchase the Aircraft, LESSOR may sell the Aircraft to
LESSOR's purchaser provided such purchaser complies with and
meets all of the requirements of this Article 24. LESSOR will
advise LESSEE as soon as possible of any offers LESSOR
receives regarding the purchase of the Aircraft that would
trigger this provision.
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ARTICLE 25 DEFAULT OF LESSEE
---------- -----------------
25.1 LESSEE Notice to LESSOR. LESSEE will promptly notify LESSOR if
LESSEE becomes aware of the occurrence of any Default.
25.2 Events of Default. The occurrence of any of the following will
constitute an Event of Default and material breach of this
Lease by LESSEE:
(a) LESSEE fails to take delivery of the Aircraft when
obligated to do so under the terms of this Lease.
(b) LESSEE fails to make a Rent or other payment due
hereunder in the manner and by the date provided herein and
such failure continues for three (3) Business Days after such
payment is due.
(c) LESSEE fails to obtain or maintain the insurance
required by Article 18.
(d) LESSEE fails to return the Aircraft to LESSOR on the
Expiration Date in accordance with Article 23 unless delay is
caused solely by LESSOR.
(e) LESSEE fails to observe or perform any of its other
obligations hereunder and fails to cure the same within
fifteen (15) days after written notice thereof to LESSEE. If
such failure cannot by its nature be cured within fifteen (15)
days, LESSEE will have the reasonable number of days necessary
to cure such failure (not to exceed a period of sixty (60)
days) so long as it uses diligent and all reasonable efforts
to do so.
(f) Any representation or warranty of LESSEE herein
proves to have been untrue in any material respect as of the
date when made and the same remains material at the time of
discovery.
(g) The registration of the Aircraft is cancelled other
than as a result of an act or omission of LESSOR.
(h) LESSEE or an approved sublessee no longer has
unencumbered control (other than Permitted Liens) or
possession of the Aircraft or Engines, except as otherwise
permitted by this Lease.
(i) LESSEE temporarily or permanently discontinues
business (except in the case of a labor action which does not
create a material risk of LESSEE not being able to perform
hereunder) or sells or otherwise disposes of all or
substantially all of its assets, except as may be specifically
permitted under this Lease.
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(j) LESSEE no longer possesses the licenses, certificates
and permits required for the conduct of its business as a
certificated air carrier in the U.S.
(k) LESSEE (i) suspends payment on its debts or other
obligations generally, (ii) is unable to or admits its
inability to pay its debts or other obligations as they fall
due, (iii) is adjudicated or becomes bankrupt or insolvent or
(iv) proposes or enters into any composition or other
arrangement for the benefit of its creditors generally.
(l) Any proceedings, resolutions, filings or other steps
are instituted with respect to LESSEE relating to the
bankruptcy, liquidation, reorganization or protection from
creditors of LESSEE or a substantial part of LESSEE's
property. If instituted by LESSEE, the same will be an
immediate Event of Default. If instituted by another Person,
the same will be an Event of Default if not dismissed,
remedied or relinquished within sixty (60) days.
(m) Any order, judgment or decree is entered by any court
of competent jurisdiction appointing a receiver, trustee or
liquidator of LESSEE or a substantial part of its property, or
if a substantial part of LESSEE's property is to be
sequestered. If instituted or done with the consent of LESSEE,
the same will be an immediate Event of Default. If instituted
by another Person, the same will be an Event of Default if not
dismissed, remedied or relinquished within sixty (60) days.
(n) Any indebtedness for borrowed moneys or a guarantee
or similar obligation owed by LESSEE with an unpaid balance of
Three Million U.S. Dollars (US$3,000,000) or more becomes due
or is declared due before its stated maturity or LESSEE is in
payment default under any other lease, conditional sale
agreement or other agreement (and any applicable cure periods
have expired) pursuant to which LESSEE has possession of any
aircraft.
(o) LESSEE is in default under any other lease or
agreement between LESSEE and LESSOR and the same is not waived
or cured within its specified cure period.
(p) Any approved sublessee acts so as to prevent present
or future performance by LESSEE of its obligations under this
Lease.
25.3 LESSOR's General Rights. Upon the occurrence of any Event of
Default, all rights of LESSEE hereunder to continued
possession of the Aircraft will immediately cease and
terminate
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(but LESSEE's obligations hereunder will continue, including
the obligations to protect and insure the Aircraft as
required under this Lease). LESSOR may do all or any of the
following at its option (in addition to such other rights
and remedies which LESSOR may have by statute or otherwise
but subject to any requirements of applicable Law):
(a) Terminate this Lease by giving written notice to
LESSEE.
(b) Require that LESSEE immediately move the Aircraft to
an airport or other location in the continental U.S.
designated by LESSOR.
(c) For LESSEE's account, do anything that may reasonably
be required to cure any default and recover from LESSEE all
reasonable costs, including legal fees and expenses incurred
in doing so and Default Interest.
(d) Proceed as appropriate to enforce performance of this
Lease and to recover any damages for the breach hereof,
including the amounts specified in Article 25.5.
(e) Terminate this Lease by taking possession of the
Aircraft or by serving notice requiring LESSEE to return the
Aircraft to LESSOR at the location specified by LESSOR in the
continental U.S. If LESSOR takes possession of the Aircraft,
it may enter upon LESSEE's premises where the Aircraft is
located without liability. Upon repossession of the Aircraft,
LESSOR will then be entitled to sell, lease or otherwise deal
with the Aircraft free of any right or claim of LESSEE. LESSOR
will be entitled to the full benefit of its bargain with
LESSEE.
(f) Apply all or any portion of the Security Deposit or
the Reserves and any other security deposits or reserves held
by LESSOR pursuant to any other agreements between LESSOR and
LESSEE to any amounts due.
25.4 Deregistration and Export of Aircraft. If an Event of Default
has occurred and is continuing, LESSOR may take all steps necessary to
deregister the Aircraft in and export the Aircraft from the State of
Registration.
25.5 LESSEE Liability for Damages. If an Event of Default occurs,
in addition to all other remedies available at law or in equity, LESSOR has the
right to recover from LESSEE and LESSEE will pay LESSOR within two (2) Business
Days after LESSOR's written demand, all of the following, but without
duplication:
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(a) All amounts which are then due and unpaid hereunder
and which become due prior to the earlier of LESSOR's recovery
of possession of the Aircraft or LESSEE making an effective
tender thereof.
(b) Any losses suffered by LESSOR because of LESSOR's
inability to place the Aircraft on lease with another lessee
or to otherwise utilize the Aircraft on financial terms as
favorable to LESSOR as the terms hereof or, if LESSOR elects
to sell or dispose of the Aircraft, the funds arising from
such sale or other disposition are not as profitable to LESSOR
as leasing the Aircraft in accordance with the terms hereof
would have been (and LESSOR will be entitled to accelerate any
and all scheduled Rent which would have been due from the date
of LESSOR's recovery or repossession of the Aircraft through
the Expiration Date).
(c) All properly documented costs associated with
LESSOR's exercise of its remedies hereunder, including but not
limited to repossession costs, legal fees, Aircraft storage
costs, Aircraft re-lease or sale costs and LESSOR's internal
reasonable and actual costs and expenses (including the cost
of personnel time calculated based upon the compensation paid
to the individuals involved on an annual basis).
(d) Any amount of principal, interest, fees or other sums
paid or by LESSOR payable on account of funds borrowed in
order to carry any unpaid amount resulting from LESSEE's
failure to make any payments due hereunder.
(e) Any loss, cost, expense or liability sustained by
LESSOR due to LESSEE's failure to redeliver the Aircraft in
the condition required by this Lease.
(f) Any other loss, damage, expense, cost or liability
which LESSOR suffers or incurs as a result of the Event of
Default and/or termination of this Lease.
25.6 Waiver of Default. By written notice to LESSEE, LESSOR may at
its election waive any Default or Event of Default and its consequences and
rescind and annul any prior notice of termination of this Lease. The respective
rights of the parties will then be as they would have been had no Default or
Event of Default occurred and no such notice been given.
25.7 Present Value of Payments. In calculating LESSOR's damages
hereunder, upon an Event of Default all Rent that would have been due hereunder
during the Lease Term if an Event of Default had not occurred will be calculated
on a present value basis using a discount rate of five percent (5%) per annum
discounted to the date of payment.
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25.8 Use of "Termination Date". For avoidance of doubt, it is
agreed that if this Lease terminates and the Aircraft is repossessed by LESSOR
due to an Event of Default, then, notwithstanding the use of the term
"Termination Date" in this Lease, the period of the Lease Term and the
"Expiration Date" will be utilized in calculating the damages to which LESSOR is
entitled pursuant to Article 25.5.
25.9 Mitigation of Damages. LESSOR will use reasonable efforts to
mitigate damages.
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ARTICLE 26 NOTICES
---------- -------
26.1 Manner of Sending Notices. Any notice, request or information
required or permissible under this Lease will be in writing and in English.
Notices will be delivered in person or sent by telex, fax, letter (mailed
airmail, certified and return receipt requested), or by expedited delivery
addressed to the parties as set forth in Article 26.2. In the case of a telex or
fax, notice will be deemed received upon actual receipt (in the case of a fax
notice, the date of actual receipt will be deemed to be the date set forth on
the confirmation of receipt produced by the sender's fax machine immediately
after the fax is sent). In the case of a mailed letter, notice will be deemed
received on the tenth (10th) day after mailing. In the case of a notice sent by
expedited delivery, notice will be deemed received on the date of delivery set
forth in the records of the Person which accomplished the delivery. If any
notice is sent by more than one of the above listed methods, notice will be
deemed received on the earliest possible date in accordance with the above
provisions.
26.2 Notice Information. Notices will be sent:
If to LESSOR: INTERNATIONAL LEASE FINANCE CORPORATION
1999 Avenue of the Stars
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Xxxxxx Xxxxxx of America
Attention: Legal Department
Telex: 69-1400 INTERLEAS BVHL
Fax: 000-000-0000
Telephone: 000-000-0000
If to LESSEE: WESTERN PACIFIC AIRLINES, INC.
0000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Fax: 0-000-000-0000
Telephone: 0-000-000-0000
or to such other places and numbers as either party directs in writing to the
other party.
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ARTICLE 27 GOVERNING LAW AND JURISDICTION
---------- ------------------------------
27.1 California Law. This Lease is being delivered in the State of
California and will in all respects be governed by and construed in accordance
with the Laws of the State of California (notwithstanding the conflict Laws of
the State of California).
27.2 Non-Exclusive Jurisdiction in California. As permitted by
Section 410.40 of the California Code of Civil Procedure, the parties hereby
irrevocably submit to the non-exclusive jurisdiction of the Federal District
Court for the Central District of California and the State of California
Superior or Municipal Court in Los Angeles, California. Nothing herein will
prevent either party from bringing suit in any other appropriate jurisdiction.
27.3 Service of Process. The parties hereby consent to the service
of process (i) out of any of the courts referred to above, (ii) in accordance
with Section 415.40 of the California Code of Civil Procedure by mailing copies
of the summons and complaint to the person to be served by air mail, certified
or registered mail to the address set forth in Article 26.2, postage prepaid,
return receipt requested or (iii) in accordance with the Hague Convention, if
applicable.
27.4 Prevailing Party in Dispute. If any legal action or other
proceeding is brought in connection with or arises out of any provisions in this
Lease, the prevailing party will be entitled to recover reasonable attorneys'
fees and other costs incurred in such action or proceedings. The prevailing
party will also, to the extent permissible by Law, be entitled to receive pre-
and post-judgment Default Interest.
27.5 Waiver. LESSEE and LESSOR hereby waive the right to a trial by
jury. LESSEE and LESSOR hereby irrevocably waive any objection which it may now
or hereafter have to the laying of the venue of any suit, action or proceeding
arising out of or related to this Lease brought in any of the courts referred to
in Article 27.2, and hereby further irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
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ARTICLE 28 MISCELLANEOUS
---------- -------------
28.1 Press Releases. The parties will give copies to one another,
in advance if possible, of all news, articles and other releases provided to the
public media specifically regarding this Lease.
28.2 Power of Attorney. LESSEE hereby irrevocably appoints LESSOR
as its attorney for the purpose of exercising remedies provided in Article 25
following an Event of Default, including without limitation, the return,
repossession, deregistration of the Aircraft.
28.3 LESSOR Performance for LESSEE. The exercise by LESSOR of its
remedy of performing a LESSEE obligation hereunder is not a waiver of and will
not relieve LESSEE from the performance of such obligation at any subsequent
time or from the performance of any of its other obligations hereunder.
28.4 LESSOR's Payment Obligations. Any obligation of LESSOR under
this Lease to pay or release any amount to LESSEE is conditioned upon (i) all
amounts then due and payable by LESSEE to LESSOR under this Lease or under any
other agreement between LESSOR and LESSEE having been paid in full and (ii) no
Default having occurred and continuing hereunder at the time such payment or
release of payment is payable to LESSEE.
28.5 Usury Laws. The parties intend to contract in strict
compliance with the usury Laws of the State of California and, to the extent
applicable, the U.S. Notwithstanding anything to the contrary in the Operative
Documents, LESSEE will not be obligated to pay Default Interest or other
interest in excess of the maximum non-usurious interest rate, as in effect from
time to time, which may by applicable Law be charged, contracted for, reserved,
received or collected by LESSOR in connection with the Operative Documents.
During any period of time in which the then-applicable highest lawful rate is
lower than the Default Interest rate, Default Interest will accrue and be
payable at such highest lawful rate. However, if at later times such highest
lawful rate is greater than the Default Interest rate, then LESSEE will pay
Default Interest at the highest lawful rate until the Default Interest which is
paid by LESSEE equals the amount of interest that would have been payable in
accordance with the interest rate set forth in Article 5.7.
28.6 Delegation by LESSOR. LESSOR may delegate to any Person(s) all
or any of the rights, powers or discretion vested in it by this Lease and any
such delegation may be made upon such terms and conditions as LESSOR in its
absolute discretion thinks fit but no such delegation shall release LESSOR from
any of its obligations except to the extent discharged by such delegates.
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28.7 Confidentiality. The Operative Documents and all non-public
information obtained by either party about the other are confidential and are
between LESSOR and LESSEE only and will not be disclosed by a party to third
parties (other than to such party's auditors or legal advisors or as required in
connection with any filings of this Lease in accordance with Article 14 or
otherwise as required by law) without the prior written consent of the other
party. If disclosure is required as a result of applicable Law, LESSEE and
LESSOR will cooperate with one another to obtain confidential treatment as to
the commercial terms and other material provisions of this Lease.
28.8 Rights of Parties. The rights of the parties hereunder are
cumulative, not exclusive, may be exercised as often as each party considers
appropriate and are in addition to its rights under general Law. The rights of
one party against the other party are not capable of being waived or amended
except by an express waiver or amendment in writing. Any failure to exercise or
any delay in exercising any of such rights will not operate as a waiver or
amendment of that or any other such right any defective or partial exercise of
any such rights will not preclude any other or further exercise of that or any
other such right and no act or course of conduct or negotiation on a party's
part or on its behalf will in any way preclude such party from exercising any
such right or constitute a suspension or any amendment of any such right.
28.9 Further Assurances. Each party agrees from time to time to do
and perform such other and further acts and execute and deliver any and all such
other instruments as may be required by Law or reasonably requested by the
auditors of the other party or requested by other party to establish, maintain
or protect the rights and remedies of the requesting party or to carry out and
effect the intent and purpose of this Lease.
28.10 Use of Word "including". The term "including" is used herein
without limitation and by way of example only.
28.11 Headings. All article and paragraph headings and captions are
purely for convenience and will not affect the interpretation of this Lease. Any
reference to a specific article, paragraph or section will be interpreted as a
reference to such article, paragraph or section of this Lease.
28.12 Invalidity of any Provision. If any of the provisions of this
Lease become invalid, illegal or unenforceable in any respect under any Law, the
validity, legality and enforceability of the remaining provisions will not in
any way be affected or impaired.
28.13 Negotiation. The terms of this Lease are agreed by LESSOR from
its principal place of business in Los Angeles, California.
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28.14 Time is of the Essence. Time is of the essence in the
performance of all obligations of the parties under this Lease and,
consequently, all time limitations set forth in the provisions of this Lease
will be strictly observed.
28.15 Amendments in Writing. The provisions of this Lease may only
be amended or modified by a writing executed by LESSOR and LESSEE.
28.16 Counterparts. This Lease may be executed in any number of
identical counterparts, each of which will be deemed to be an original, and all
of which together will be deemed to be one and the same instrument when each
party has signed and delivered one such counterpart to the other party.
28.17 Delivery of Documents by Fax. Delivery of an executed
counterpart of this Lease or of any other documents in connection with this
Lease by fax will be deemed as effective as delivery of an originally executed
counterpart. Any party delivering an executed counterpart of this Lease or other
document by fax will also deliver an originally executed counterpart, but the
failure of any party to deliver an originally executed counterpart of this Lease
or such other document will not affect the validity or effectiveness of this
Lease or such other document.
28.18 Entire Agreement. The Operative Documents constitute the
entire agreement between the parties in relation to the leasing of the Aircraft
by LESSOR to LESSEE and supersede all previous proposals, agreements and other
written and oral communications in relation hereto. The parties acknowledge that
there have been no representations, warranties, promises, guarantees or
agreements, express or implied, except as set forth herein.
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IN WITNESS WHEREOF, LESSEE and LESSOR have caused this Lease to be
executed by their respective officers of this 31st day of May, 1996.
INTERNATIONAL LEASE FINANCE WESTERN PACIFIC AIRLINES, INC.
CORPORATION
By: ______________________________ By: _______________________________
Its: _____________________________ Its: ______________________________
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EXHIBIT A AIRCRAFT DESCRIPTION
--------- --------------------
Aircraft Manufacturer and Model: Boeing 737-3Q8
Seating Configuration: 148Y
Manufacturer's Serial Number: 24299
Registration Xxxx: N956WP
(formerly EC-FER)
Engine Manufacturer and Model: CFM-56-3B2
Engine Serial Numbers: 722248 and 722249
Engine Thrust Rating 22,000 pounds
Maximum Gross Takeoff Weight: 137,000 pounds
-86-
EXHIBIT B CONDITION AT DELIVERY
--------- ---------------------
Engines
-------
Each Engine will be in serviceable condition.
Each life limited part of an Engine will have at least three thousand (3,000)
cycles remaining until removal.
LESSOR will accomplish maximum takeoff power assurance checks of each Engine in
accordance with the Engine manufacturer's recommended procedures.
LESSOR will accomplish a full hot and cold section videotape borescope
inspection of each Engine in accordance with the manufacturer's maintenance
manual and ensure all parameters are within the engine manufacturer's
maintenance manual limits.
LESSEE is entitled to be present during accomplishment of the above items.
APU
---
The APU will be in serviceable condition.
Landing Gear
------------
The installed landing gear will have at least fifty percent (50%) of its
allowable hours/cycles remaining until its next overhaul.
Time-Controlled Components
--------------------------
Time controlled ("Hard-time") components will have at least three thousand
(3,000) hours/cycles or twelve (12) months remaining until the next scheduled
overhaul.
Maintenance Checks
------------------
The Aircraft will be delivered fresh from a full and complete systems, zonal,
corrosion and structural "7C" check per the MPD and all calendar controlled
corrosion inspection tasks will be completed corresponding with the age of the
Aircraft.
The Aircraft will be weighed prior to delivery and LESSOR shall revise the
weight and balance records and compute new weight and balance data.
Interior Configuration
----------------------
The Aircraft will be delivered with 148 Xxxxxx Xxxxx tourist class seats, four
(4) Xxxxxxxx xxxxxxx (X0, X0, X0 and G6) and three (3) lavatories ((1) FWD LAV A
and (2) AFT, LAV B, LAV C) installed. However, LESSEE has contracted directly
with Pemco to configure the Aircraft with 138 tourist class seats.
Exterior & Interior Markings
----------------------------
The Aircraft will be delivered with the fuselage stripped, primed and painted
white in accordance with Major U.S. Airline standards (provided LESSEE advises
LESSOR of the paint specification in
-87-
sufficient time not to delay delivery or cause overtime charges) and all FAA
required exterior and interior placards, signs and markings will be properly
attached, free of damage, clean and legible.
The flight deck paint will be touched up as necessary.
FAA Airworthiness Directives
----------------------------
All applicable FAA AD's which require terminating action within one year after
the delivery of the Aircraft will be complied with.
Aircraft Damage & Repairs
-------------------------
All damage on the Aircraft which is out of limits as prescribed in the B737 SRM
will be permanently repaired in accordance with FAA-approved data.
All existing repairs will be permanent FAA-approved repairs.
Deferred Maintenance Items
--------------------------
All pilot discrepancies and deferred maintenance items will be cleared on a
terminating action basis at the time of delivery, including those defects noted
during the acceptance flight check which are out of manufacturers approved
limits.
Certification
-------------
The Aircraft will be airworthy and delivered with a current and valid US FAA
Certificate of Airworthiness for Transport Category Aircraft in accordance with
FAR Part 21 (TCAS will not be installed on the Aircraft).
Aircraft Cleanliness
--------------------
The Aircraft interior (including flight deck, passenger cabin and windows),
exterior and cargo compartments will be clean and cosmetically acceptable in
accordance with Major U.S. Airline standards and ready to be placed into
immediate commercial airline passenger flight operations.
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EXHIBIT C CERTIFICATE OF INSURANCE
--------- ------------------------
[Refer to Aircraft Lease Agreement dated as of May 31, 1996 between LESSEE and
LESSOR (the "Lease"). If applicable, insurance certificates from both the
insurers and reinsurers will be provided. If there is a LESSOR's Lender, include
references to it where appropriate after references to LESSOR.]
To: INTERNATIONAL LEASE FINANCE CORPORATION ("LESSOR")
1999 Avenue of the Stars
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
WESTERN PACIFIC AIRLINES, INC.
Boeing 737-3Q8
Manufacturer's Serial No.: 24299
Registration Xxxx: N956WP (the "Aircraft")
The following security has subscribed to the insurance and/or
reinsurance policies:
[LIST COMPANIES & PERCENTAGES]
THIS IS TO CERTIFY THAT, as Insurance Brokers, we have effected Fleet
Insurance in respect of aircraft owned or operated by LESSEE (including the
Aircraft) as specified below.
AIRCRAFT HULL ALL RISKS
-----------------------
COVERING:
--------
All risks of physical loss or damage to the Aircraft from any cause
(subject only to the exclusions as specified below), for an Agreed
Value of Aircraft in the amount of (US$23,500,000 for years 1-5 and
$20,000,000 thereafter).
DEDUCTIBLES:
-----------
US$ each and every loss. Not applicable to Total
Loss/Constructive Total Loss or Arranged Total Loss.
GEOGRAPHICAL COVERAGE:
---------------------
Worldwide
AVIATION AND AIRLINE GENERAL THIRD PARTY LIABILITY
--------------------------------------------------
COVERING:
--------
Aircraft Third Party, Passenger, Baggage, Cargo and Mail Liability and
Airline General Third Party Liability (including Premises,
Hangarkeepers and Products Liability) for combined single limit of not
less than US$ 600,000,000
-89-
(or such higher amount as LESSEE may carry on any other aircraft in its
fleet) any one accident/occurrence (but in the aggregate in relation to
Products Liability), extended to cover LESSEE's liability under the
Lease to the extent of the risks covered by the policy including war
and allied perils under Extended Coverage Endorsement as per AVN 52
subject only to exclusions as specified below.
GEOGRAPHICAL LIMITS:
-------------------
Worldwide
HULL WAR AND ALLIED PERILS
--------------------------
COVERING:
--------
Hull War Risks as per RJM Airline One, but including (i) confiscation
or requisition (including by State of Registration), (ii) hijacking or
other unlawful seizure or wrongful exercise of control of the Aircraft
or crew in flight (including any attempt at such seizure or control)
and including "All Risks" Continuation Clause and Extortion Risks
(including expenses) and covering claims excluded from Hull All Risks
Policy while Aircraft outside Assured's control by reason of perils
insured under this policy, for an Agreed Value of Aircraft in the
amount of US$ 23,500,000
DEDUCTIBLE:
----------
GEOGRAPHICAL LIMITS:
-------------------
Worldwide
AIRCRAFT SPARES ALL RISKS INSURANCE
-----------------------------------
COVERING:
--------
All risks of physical loss or damage to Aircraft Parts or spares or
Engines at all times when removed from the Aircraft from whatever
cause, subject only to the exclusions specified below, including the
risks set down in AVN 48B other than paragraphs (a) and (b) thereof
(but including paragraph (a) in respect of transit risks) for limits
of:
US$ [AMOUNT] any one location US$ [AMOUNT] any one sending and covering
replacement cost.
DEDUCTIBLE:
----------
___________ - each and every loss
-90-
GEOGRAPHICAL COVERAGE:
---------------------
Worldwide
INSURANCE REQUIRED BY MANUFACTURER
----------------------------------
LESSEE will carry the insurance required by Manufacturer in connection
with LESSOR's assignment of Manufacturer's warranties and product
support to LESSEE.
CONTRACTUAL INDEMNITY
---------------------
LESSEE has insurance coverage for the indemnities agreed to by LESSEE
pursuant to Article 17 of the Lease to the extent provided in the
relevant policies.
PERIOD OF COVERAGE (ALL POLICIES)
---------------------------------
From Delivery Date of Aircraft to [EXPIRATION DATE]
It is further certified that LESSOR has an interest in respect of the
Aircraft under the Lease. Accordingly, with respect to losses occurring
during the period from the Effective Date until the expiry of the
Insurance or until the expiry or agreed termination of the Lease or
until the obligations under the Lease are terminated by any action of
the Insured or Lessor and in consideration of the Additional Premium it
is confirmed that the Insurance afforded by the Policy is in full force
and effect and it is further agreed that the following provisions are
specifically endorsed to the Policy.
1. UNDER THE HULL (ALL RISKS AND HULL WAR AND ALLIED RISKS) AND
AIRCRAFT SPARES INSURANCES
--------------------------------------------------------------------------------
(a) In respect of any claim on Equipment that becomes
payable on the basis of a Total Loss, settlement (net of any relevant Policy
Deductible) shall be made to, or to the order of the contract Party(ies). In
respect of any other claim, settlement (net of any relevant Policy Deductible)
shall be made with such party(ies) as may be necessary to repair the Equipment
unless otherwise agreed after consultation between the Insurers and the Insured
and, where necessary under the terms of the Contract(s), the Contract
Party(ies). Such payments shall only be made provided they are in compliance
with all applicable laws and regulations.
(b) Insurers agree 50/50 settlement in terms of AVS 103.
(c) Insurers have no right to replace the Aircraft on a
Total Loss (arranged, constructive or otherwise).
-91-
(d) Insurers recognize that LESSEE and LESSOR have agreed
that a Total Loss of the Airframe will constitute a Total Loss of the Aircraft.
(e) In the event of Total Loss of the Aircraft, Insurers
agree to pay LESSOR all amounts up to the Agreed Value.
(f) In the event that LESSEE does reinsure, the following
cut-through clause will apply: Insurers confirm that in the event of any claim
arising under the hull insurances, the Reinsurers will in lieu of payment of the
Insurers, its successors in interest and assigns, pay to the person named as
sole loss payee under the original insurances that portion of any loss due for
which the Reinsurers would otherwise be liable to pay the Insurers (subject to
proof of loss), it being understood and agreed that any such payment by any
Reinsurers will fully discharge and release such Reinsurer from any and all
further liability in connection therewith and provide for payment to be made
notwithstanding (a) any bankruptcy, insolvency, liquidation or dissolution of
the Insurers and (b) that the Insurers have made no payment under the original
insurance policies.
(g) Insurers confirm that under the insurance policies,
if the Insured installs an engine owned by a third party on the Aircraft, either
(i) the hull insurance will automatically increase to such higher amount as is
necessary in order to satisfy both Lessor's requirement to receive the Agreed
Value in the event of a Total Loss, Constructive Total Loss or Arranged Total
Loss and the amount required by the third party engine owner, or (ii) separate
additional insurance on such engine will attach in order to satisfy separately
the requirements of the Insured to such third party engine owner.
2. UNDER THE LEGAL LIABILITY INSURANCE
-----------------------------------
(a) Subject to the provisions of this Endorsement, the
Insurance will operate in all respects as if a separate Policy had been issued
covering each party insured hereunder, but this provision will not operate to
include any claim howsoever arising in respect of loss or damage to the Aircraft
insured under the Hull or Spares Insurance of the Insured. Notwithstanding the
foregoing the total liability of Insurers in respect of any and all Insureds
will not exceed the limits of liability stated in the Policy.
(b) The Insurance provided hereunder will be primary and
without right of contribution from any other insurance which may be available to
the Lessor.
(c) This Endorsement does not provide coverage for the
Lessor with respect to claims arising out of its legal liability as
manufacturer, repairer, or servicing agent of the Aircraft.
-92-
3. UNDER ALL INSURANCES
--------------------
(a) Lessor, its successors and assigns, and (with respect
to Aviation and Airline General Third Party Liability only) its directors,
officers and employees for their respective rights and interests, are included
as Additional Insured.
(b) The cover afforded to Lessor by the Policy in
accordance with this Endorsement will not be invalidated by any act or omission
(including misrepresentation and non-disclosure) of any other person or party
which results in a breach of any term, condition or warranty of the Policy
PROVIDED THAT Lessor has not caused, contributed to or knowingly condoned the
said act or omission.
(c) Lessor will have no responsibility for premium and
insurers will waive any right of set-off or counterclaim against Lessor except
in respect of outstanding premium in respect of the Aircraft, provided that
Insurer may only set-off for premiums against the proceeds of the hull insurance
for outstanding premiums in connection with hull all risks and hull war and
allied perils insurance.
(d) Upon payment of any loss or claim to or on behalf of
Lessor, Insurers will to the extent and in respect of such payment be thereupon
subrogated to all legal and equitable rights of Lessor indemnified hereby (but
not against Lessor). Insurers will not exercise such rights without the consent
of those indemnified, such consent not to be unreasonably withheld. At the
expense of Insurers Lessor will do all things reasonably necessary to assist the
Insurers to exercise said rights.
(e) Except in respect of any provision for Cancellation
or Automatic Termination specified in the Policy or any endorsement thereof,
cover provided by this Endorsement may only be canceled or materially altered in
a manner adverse to Lessor by the giving of not less than thirty (30) days
notice in writing to the appointed broker. Notice will be deemed to commence
from the date such notice is given by the Insurers. Such notice will NOT,
however, be given at normal expiry date of the Policy or any endorsement.
4. EXCEPT AS SPECIFICALLY VARIED OR PROVIDED BY THE TERMS OF THE
ENDORSEMENT:
--------------------------------------------------------------------------------
(a) LESSOR IS COVERED BY THE POLICY SUBJECT TO ALL TERMS,
CONDITIONS, LIMITATIONS, WARRANTIES, EXCLUSIONS AND CANCELLATION PROVISIONS
THEREOF.
(b) THE POLICY WILL NOT BE VARIED BY ANY PROVISIONS
CONTAINED IN THE LEASE WHICH PURPORT TO SERVE AS AN ENDORSEMENT OR AMENDMENT TO
THE POLICY.
-93-
SUBJECT (save as specifically stated in this Certificate) to policy
terms, conditions, limitations and exclusions.
Yours faithfully,
[BROKERS]
-94-
EXHIBIT D BROKERS' LETTER OF UNDERTAKING
--------- ------------------------------
To: INTERNATIONAL LEASE FINANCE CORPORATION
1999 Avenue of the Stars
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Xxxxxx Xxxxxx
Date: Our Ref:
Dear Sirs:
WESTERN PACIFIC AIRLINES, INC.
Boeing 737-3Q8
Manufacturer's Serial No.: 24299
Registration Xxxx: N956WP
We confirm that insurance has been effected for the account of [LESSEE]
(the "Operator") covering all aircraft owned or operated by them, including the
above-mentioned aircraft (the "Aircraft"). [Also confirm, if applicable, the
amount of any hull all risks or hull war and allied perils on the Aircraft which
LESSEE is carrying in excess of the Agreed Value (which excess insurance would
be payable to LESSEE). Such excess insurance may not exceed ten percent (10%) of
the Agreed Value.]
Pursuant to instructions received from the Operator and in
consideration of your approving the arrangement of the Operator's "Fleet Policy"
(under which the above-mentioned Aircraft is insured) through the intermediary
of ourselves as Brokers in connection with the insurance (the "Insurance")
mentioned in our Certificate of Insurance (Reference No. [ ] dated [ ] and
attached hereto), we undertake as follows:
1. In relation to the Hull and War Risks Insurance to hold to
your order the insurance Slips or Contracts and any Policies which may be issued
or any policies substituted (with your consent) therefor (but only insofar as
the same relate to the Aircraft only) and the benefit of the Hull and War Risks
Insurance thereunder, but subject to our requirements to operate the Fleet
Policy insofar as it relates to any other aircraft insured thereunder.
2. To advise you of any of the following:
(a) If any insurer cancels or gives notice of
cancellation of any of the Insurance at least thirty (30) days (or such lesser
period as may be available in the case of war and Allied Perils) before such
cancellation is to take effect in respect of the Aircraft.
-95-
(b) Of any act or omission or of any event (including
non-payment of premium) of which we have knowledge or are notified and which
might invalidate or render unenforceable in whole or in part any of the
Insurance, insofar as the same relate to the Aircraft.
(c) If we do not receive instructions to renew all or any
of the Insurance at least thirty (30) days prior to their expiration.
(d) If any of the Insurance are not renewed on the same
terms (save as to premium and period of cover and as you might otherwise have
notified us to be acceptable to you) seven (7) days prior to expiry thereof.
The above undertakings are given subject to our continuing appointment
for the time being as Insurance Brokers to the Operator.
We also undertake to advise you if we cease to be Insurance Brokers to
the operator.
Yours faithfully,
-96-
EXHIBIT E ESTOPPEL AND ACCEPTANCE CERTIFICATE
--------- -----------------------------------
WESTERN PACIFIC AIRLINES, INC. ("LESSEE"), a corporation organized
under the laws of Colorado does hereby represent, acknowledge, warrant and agree
as follows:
1. LESSEE and INTERNATIONAL LEASE FINANCE CORPORATION, as LESSOR,
have entered into an Aircraft Lease Agreement dated as of May 31, 1996
(hereinafter referred to as the "Lease"). Words used herein with capital letters
and not otherwise defined will have the meanings set forth in the Lease.
2. LESSEE has this ____ day of ___________, 19__ (Time: ________)
at ________________________ received from LESSOR possession of:
(a) One (1) Boeing 737-3Q8 Aircraft, bearing
Manufacturer's serial number 24299, together with two (2) CFM-56- 3B2 engines
bearing manufacturer's serial numbers 722248 and 722249, all in an airworthy
condition and
(b) All Aircraft Documentation, including the usual and
customary manuals, logbooks, flight records and historical information regarding
the Aircraft, Engines and Parts, as listed in the Document Receipt attached
hereto.
3. The Airframe, Engines and Parts had the following hours/cycles
at Delivery:
(a) Airframe:
Total hours _________ Total landings ___________
_____ hours/_____ cycles since last "7C" check
_____ hours/_____ cycles since last "22,400 flight
hour structural check" check
(b) Engines:
Total Hrs/Cycles since
Position Serial No. Total Hrs Cycles last shop visit
-------- ---------- --------- ------ ----------------
-97-
Time Remaining to next
Life Limited Part Removal
-------------------------
Hours Cycles
----- ------
MSN
MSN
(c) APU: MSN ____
Total hours _____
_______ hours/_______ cycles remaining until next
HSI inspection
_______ hours/_______ cycles remaining on turbine
and compressor life limited parts
(d) Landing Gears:
Hrs/Cycles Hrs/Cycles to
Total since last next Sched.
Position Serial No. Hrs/Cycles Overhaul Removal
-------- ---------- ---------- ---------- -------------
Nose
Right Main
Left Main
(e) Status of components or Parts with time/cycle and
calendar limits (see attached sheet)
(f) Fuel on board at delivery: _______ (circle one)
pounds/kilos (_______ gallons)
(g) Tire life remaining ____, ____, ____, ____
(h) Brake life remaining ____, ____, ____, ____
4. All of the foregoing has been delivered and accepted on the
date set forth above to LESSEE's full satisfaction and pursuant to the terms and
provisions of the Lease.
5. Pursuant to the terms of the Lease, the first Rent payment was
due and payable one (1) Business Day prior to the date set forth above and all
subsequent monthly payments are due and payable as provided in Article 5.3.2 of
the Lease.
6. The Aircraft, Engines, Parts and Aircraft Documentation as
described in the Lease have been fully examined by LESSEE and have been received
in a condition fully satisfactory to LESSEE and in full conformity with the
Lease in every respect.
-98-
7. The Lease is in full force and effect, LESSOR has fully, duly
and timely performed all of its obligations of every kind or nature thereunder
and LESSEE has no claims, offsets, deductions, set-off or defenses of any kind
or nature in connection with the Lease.
8. Prior to the Delivery Date, LESSEE has obtained all required
permits, authorizations, licenses and fees of the State of Registration or any
Government Entity thereof necessary in order for LESSEE to operate the Aircraft
as permitted by the terms of the Lease.
Dated on the date set forth above
WESTERN PACIFIC AIRLINES, INC.
By:__________________________
Its:_________________________
AGREED AND ACCEPTED:
INTERNATIONAL LEASE FINANCE CORPORATION
By:______________________
Title:___________________
Date:____________________
ATTACHMENTS: 1. List of Loose Equipment
2. List of Aircraft Documentation
3. List of Discrepancies
4. List of time/cycle/calendar controlled
components and times since overhaul or new.
-99-
ATTACHMENT 1 TO ESTOPPEL AND ACCEPTANCE CERTIFICATE
---------------------------------------------------
LIST OF LOOSE EQUIPMENT
-----------------------
-100-
ATTACHMENT 2 TO ESTOPPEL AND ACCEPTANCE CERTIFICATE
---------------------------------------------------
LIST OF AIRCRAFT DOCUMENTATION
------------------------------
[The (a) manuals,and (b) Aircraft records and historical documents set
forth below are to be returned with the Aircraft in a current, up-to-date and
correct status]
MANUALS
-------
Name
----
1. FAA Approved Airplane Flight Manual
2. Manufacturer's Operations Manual - Volume No. _____
3. Quick Reference Handbook
4. Maintenance Manuals
5. Wiring Diagram Manuals
6. Structural Repair Manual
7. Illustrated Parts Catalog
8. Vendor Illustrated Parts Catalog
9. Overhaul Manuals
10. Vendor Overhaul Manuals
11. Drawings (Major Assembly and Installation)
12. Weight and Balance Control and Loading Manual
13. Weight and Balance Manual Supplement
14. Actual Weight and Balance Compliance
-101-
AIRCRAFT RECORDS AND HISTORICAL DOCUMENTS
-----------------------------------------
1. Aircraft log book (current and file copies)
2. Aircraft Readiness Log (revised to time of return)
3. Maintenance Time Control Report (components, maintenance visit, special
items next due Airframe hours and cycles)
4. Aircraft previous maintenance visit record including the last inspection
performed.
5. Airworthiness Directive Compliance Summary
6. Rigging Document
7. Serviceable Tags for all rotable components installed (Airframe & Engines)
8. ADs requiring continuous surveillance
9. Service bulletin terminated accomplishment status
10. Service bulletin requiring continuous surveillance summary and maintenance
control action
11. Airframe and component history records
12. FAA Form 337 for Airframe, repair/overhaul certification of last major
visit
13. FAA Form 337 for each Engine, repair/overhaul certification of last shop
visit
14. Engine Readiness Log for each Engine (components installed)
15. Summary of Service Bulletin's accomplished for each Engine
16. Summary of AD's accomplished for each Engine
17. SB and AD status requiring continuous surveillance with maintenance,
control action for each Engine
18. Engine time summary sheet including life limited items (for each Engine)
19. Engine log books for each Engine (current and file copies)
-102-
Receipt of the foregoing documents, except as noted,
is hereby acknowledged.
-103-
EXHIBIT F OPINION OF COUNSEL
--------- ------------------
TO BE GIVEN BY INDEPENDENT OUTSIDE COUNSEL OF LESSEE OR OTHER LAWYERS ACCEPTABLE
TO LESSOR
To: International Lease Finance Corporation
1999 Avenue of the Stars
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Xxxxxx Xxxxxx
Gentlemen:
This opinion is furnished to you pursuant to Article _______ of the Aircraft
Lease Agreement dated as of May 31, 1996 (the "Lease") between WESTERN PACIFIC
AIRLINES, INC. ("LESSEE") and INTERNATIONAL LEASE FINANCE CORPORATION
("Lessor"). Defined terms in this opinion are used herein as defined in the
Lease.
I have acted as counsel for the LESSEE in connection with the preparation,
execution and delivery of the Lease.
In that connection I have examined:
(a) The Lease and Estoppel and Acceptance Certificate
(b) The charter of the LESSEE and all amendments thereto
(the "Charter") and
(c) Such other documents, agreements and instruments, and
such treaties, laws, rules, regulations, decrees and the like, as I have deemed
necessary as a basis for the opinions hereinafter expressed.
[ (d) All of the agreements and any amendments thereto
between LESSEE and all other lessors and lenders of LESSEE covering other
aircraft operated by LESSEE on which the Engines can be installed.]
Based upon the foregoing and having regard for legal considerations which I deem
relevant, I am of the opinion that:
1. LESSEE is a corporation duly incorporated, validly existing
and in good standing under the Laws of Delaware. It has the corporate power and
authority to carry on its business as presently conducted and to perform its
obligations hereunder.
2. No authorization, approval, consent, license or order of, or
registration with, or the giving of notice to the Aviation Authority or any
other regulatory body or authority is required for the valid authorization,
execution, delivery and performance by the LESSEE of the Lease.
-104-
3. The Lease and the Estoppel and Acceptance Certificate have
each been duly authorized, executed and delivered by LESSEE. Each such
instrument is a valid, enforceable and binding obligation of LESSEE except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
Laws of general application affecting the enforcement of creditors' rights.
4. The execution and delivery of the Lease and the Estoppel and
Acceptance Certificate, the consummation by the LESSEE of the transactions
contemplated therein and compliance by the LESSEE with the terms and provisions
thereof do not and will not contravene any Law applicable to LESSEE, or result
in any breach of or constitute any default under or result in the creation of
any lien, charge or encumbrance upon any property of LESSEE, under any
indenture, mortgage, chattel mortgage, deed of trust, conditional sales
contract, bank loan or credit agreement, corporate charter, by-law or other
agreement or instrument to which LESSEE is a party or by which LESSEE or its
properties or assets may be bound or affected.
5. Except for any filing or recording that may be required under
the U.S. Federal Aviation Administration and except for filing a UCC-1 Financing
Statement with the State of Colorado, no other filing or recording of any
instrument or document or any other acts are necessary or advisable under the
laws of the U.S. or Colorado to protect LESSOR's title to and ownership of the
Aircraft or in order for the Lease to constitute a valid and perfected lease of
record relating to the Aircraft, it being understood that such counsel expresses
no opinion as to the nature of the LESSOR's title to the Aircraft on the
Delivery Date. [In opinion given at Delivery, also confirm that the filings and
other steps described have been accomplished.]
6. LESSEE holds all licenses, certificates and permits from
applicable governmental authorities in the U.S. necessary for the conduct of its
business as a certificated air carrier and performance of its obligations under
the Lease.
7. To my knowledge, there are no suits or proceedings pending or
threatened against LESSEE before any Government Entity against or affecting
LESSEE which, if adversely determined, would have a material adverse effect on
the financial condition or business of LESSEE or its ability to perform under
the Lease, except as described in the filings provided to LESSOR pursuant to
Article 22.
8. The obligations of LESSEE under the Lease are direct, general
and unconditional obligations of LESSEE and rank or will rank at least pari
passu with all other present and future unsecured and unsubordinated obligations
(including contingent obligations) of LESSEE, with the exception of such
obligations as are mandatorily preferred by law and not by reason of any
encumbrance.
-105-
[ 9. None of the agreements and any amendments thereto between
LESSEE and all other lessors and lenders to LESSEE covering other aircraft
operated by LESSEE on which the Engines can be installed contain terms which
provide or contemplate that such other lessors or lenders will obtain any right,
title or interest in an Engine which is installed on such other aircraft.]
Very truly yours,
-106-
EXHIBIT G ASSIGNMENT OF RIGHTS (AIRFRAME)
--------- -------------------------------
Vice President - Aircraft Contracts
The Boeing Company
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Subject: Assignment of Rights - International Lease Finance Corporation, as
Lessor and _______________________, as Lessee of one B ________
Aircraft, MSN ______
Gentlemen:
In connection with International Lease Finance Corporation's lease to
_______________________________ ("Lessee") of a Boeing aircraft (more fully
described below), reference is made to the following documents:
1. Purchase Agreement No. _____ dated as of _________, 19__ between The
Boeing Company ("Boeing") and International Lease Finance Corporation
("ILFC") (the "Purchase Agreement") under which ILFC purchased a
certain Boeing Model ___-___ aircraft, bearing Manufacturer's Serial
No. _______ (the "Aircraft").
2. Spare Parts General Terms Agreement No. Q8 dated as of May 20, 1977, as
amended and supplemented, between Boeing and International Lease
Finance Corporation (the "ILFC GTA").
3. Aircraft Lease Agreement ("Lease") for the Aircraft bearing
manufacturer's serial number _____ dated as of ________ __, 19__,
between ILFC and _______________________________.
Pursuant to the Lease, ILFC has leased the Aircraft to Lessee. Included in such
Lease are the transfer to Lessee for and during the term of the Lease and
commencing on ________ __, 1996 of (a) rights related to the Aircraft under the
Purchase Agreement and (b) rights to purchase from Boeing Spare Parts related to
the Aircraft. In order to accomplish such transfer of rights, as authorized by
the provisions of Article 10 of the Purchase Agreement,
(1) Lessee, its successors and assigns, hereby agrees to be bound by and
comply with all applicable terms, conditions, and limitations of the
Purchase Agreement including, without limitation, paragraph 10
Exclusion of Liabilities, of Part A ------------------------ of Exhibit
B (Product Assurance Document) and paragraphs 1 and 2, Buyer's
Indemnification of Boeing and Buyer's ---------------------------------
------- Insurance, respectively, of Part E of Exhibit C (Customer
--------- Support Document) (matters relating to indemnification and
insurance), to the Purchase Agreement. Lessee recognizes that Boeing's
obligation to provide support and services to Lessee pursuant to
Exhibit C of the Purchase Agreement is
-107-
conditioned on the receipt by Boeing of evidence of compliance by
Lessee with the insurance requirements set forth in paragraph 2 of Part
E of Exhibit C in a form satisfactory to Boeing prior to the
commencement of such support and services; and
(2) Lessee, its successors and assigns, confirms to Boeing that Lessee
which is not presently a party to the Spare Parts General Terms
Agreement with Boeing, agrees to be bound by all applicable terms,
conditions, and limitations of the ILFC GTA including, without
limitation, paragraphs 15.9 and 15.10 of Article 15 of the ILFC GTA,
and Article 17 of the ILFC GTA, and paragraphs 9.8, 9.9 and 11 of
Exhibit A to the ILFC GTA, with respect to any Spare Parts or Leased
Parts ordered for the Aircraft; and
(3) ILFC agrees to remain responsible for any payments due Boeing (a) with
respect to the Aircraft under Exhibit D (Airframe and Engine Price
Adjustment) of the Purchase Agreement and (b) with respect to any Spare
Part or Leased Part for the Aircraft ordered by ILFC under the ILFC
GTA.
(4) Further, ILFC hereby assigns to Lessee the sole authority to exercise
all rights and powers of ILFC with respect to the Aircraft under the
Purchase Agreement. Such authorization shall continue until Boeing
shall have received from ILFC written notice to the contrary addressed
to Boeing's Vice President, Contracts, X.X. Xxx 0000, Xxxxxxx,
Xxxxxxxxxx 00000-0000. Until Boeing shall have received such notice
Boeing shall be entitled to deal exclusively and solely with Lessee
with respect to the Aircraft, under the Purchase Agreement and, with
respect to the rights, powers, duties or obligations under the Purchase
Agreement, and all actions taken by Lessee or agreements entered into
by Lessee during the period prior to Boeing's receipt of such notice,
shall be final and binding upon ILFC.
(5) Lessee hereby accepts the authorization set forth in paragraph (4)
herein and agrees to be bound by and to comply with all the terms,
conditions and limitation of the Purchase Agreement. We request that
Boeing, upon receipt of this letter, acknowledge receipt thereof and
the transfer of rights, under the Purchase Agreement as set forth
above, by
-108-
signing the acknowledgment set forth below and forwarding one copy of
this letter, so acknowledged, to each of the undersigned.
Very truly yours,
__________________________ INTERNATIONAL LEASE FINANCE
____________ (Lessee) CORPORATION (Lessor)
By: ______________________ By: _______________________
Its: _____________________ Its: ______________________
Dated: ___________________ Dated: ____________________
Boeing Acknowledgment and Consent to Assignment
-----------------------------------------------
Receipt of the above letter acknowledged and transfer of rights under the
Purchase Agreement, with respect to the Aircraft, confirmed effective as of the
date indicated below:
THE BOEING COMPANY
By:_______________________
Its:______________________
Dated:____________________
-109-
EXHIBIT H ASSIGNMENT OF RIGHTS (ENGINES)
--------- ------------------------------
___________________________ date
GENERAL ELECTRIC COMPANY
Xxx Xxxxxxx Xxx
Xxxxxxxxxx, XX 00000-0000
Attention: Ms. Riv Xxxxxxx
XX Warranties
Dear Xx. Xxxxxxx:
Reference is hereby made to that Consent to Assignment made as of April
29, 1988 (the "Consent to Assignment"), by and between GENERAL ELECTRIC COMPANY
("GE") and INTERNATIONAL LEASE FINANCE CORPORATION ("ILFC"). Terms defined in
the Consent to Assignment are used herein with the same meaning as in the
Consent to Assignment.
As of _____________, ILFC has assigned all of its rights and interest
in, to and under the Engine Warranties to _________________ ("Assignee") in
connection with its lease to Assignee of a _____________ ("Aircraft") together
with ________ (__) GE Model ________ Engines bearing Manufacturer's Serial
Numbers ____________ (the "Engines") as of the date each such Engine was
delivered to Assignee. Such assignment shall be effective from such date until
ILFC notifies GE that such assignment has been terminated.
The Assignee has accepted such assignment and all the limitations and
liabilities pertaining to the Engine Warranties as stated in the provisions of
the GTA listed in Schedule 2 to the Consent to Assignment.
A copy of the aforesaid assignment is attached hereto.
Very truly yours,
INTERNATIONAL LEASE FINANCE CORPORATION
By: ____________________________________
Its: ____________________________________
cc: Xxxxx X. Xxxxxxx
Director, Commercial Contracts
-110-
ASSIGNMENT OF WARRANTIES
________________ (date)
In consideration of ____________________ ("Lessee") leasing from International
Lease Finance Corporation ("ILFC") one (1) _______________ aircraft together
with ____________ (__) GE Model ______________ Engines bearing manufacturer's
serial numbers ___________ and __________, it is hereby agreed as follows:
1. ILFC hereby assigns and transfers to Lessee all of ILFC's
respective rights and interest in and to and in and under the
Engine Warranties set forth in and subject to the limitations
and liabilities set forth in Exhibit B, Section X (the "Engine
Warranties") of General Electric Company ("GE") - ILFC General
Terms Agreement No. 6-5792 dated 01 November 0000 (xxx "XXX")
during the term of such leases so long as Lessee is not in
default thereunder.
2. Lessee hereby accepts such assignment including all the
limitations and liabilities pertaining to said Engine
Warranties as stated in the provisions of Exhibit B, Section X
of the GTA.
3. This Agreement shall be binding upon and inure to the benefit
of each of the parties hereto and their respective successors
and assigns to the extent permitted by the GTA and hereunder.
4. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
5. This Agreement may be executed in any number of counterparts,
each of which when executed and delivered is an original but
all of which taken together constitute one and the same
instrument and any party may execute this Agreement by signing
any counterpart.
-111-
IN WITNESS WHEREOF, the authorized representative of the parties hereto have
executed this Agreement as of the day and year first above written.
For and on behalf of
INTERNATIONAL LEASE FINANCE CORPORATION
_______________________________________
For and on behalf of
_____________________________
_______________________________________
-112-
EXHIBIT I RETURN ACCEPTANCE RECEIPT
--------- -------------------------
Date _______________, 19__
1. WESTERN PACIFIC AIRLINES, INC., as LESSEE, and INTERNATIONAL
LEASE FINANCE CORPORATION, as LESSOR, have entered into an Aircraft Lease
Agreement dated as of May 31, 1996 (the "Lease"). Words used herein with capital
letters and not otherwise defined will have the meanings set forth in the Lease.
2. LESSOR has this __ day of ______, 19__ (Time: _____
_____________) at _________________________ received from LESSEE possession of:
(a) One (1) Boeing 737-3Q8, bearing Manufacturer's serial
number 24299, together with two (2) CFM-56-3B2 engines bearing manufacturer's
serial numbers 722248 and 722249, all Parts attached thereto and thereon in an
airworthy condition and
(b) All Aircraft Documentation, including the usual and
customary manuals, logbooks, flight records and historical information regarding
the Aircraft, Engines and Parts, as listed in the Document Receipt attached
hereto.
3. The Airframe, Engines and Parts had the following hours/cycles
at return:
(a) Airframe:
Total hours___________ Total landings___________
_____ hours/_____ cycles since last "C" check
_____ hours/_____ cycles since last "A" check
(b) Engines:
Total Hrs/Cycles since
Position Serial No. Total Hrs Cycles last shop visit
-------- ---------- --------- ------ ----------------
-113-
Time Remaining to next
Life Limited Part Removal
-------------------------
Hours Cycles
----- ------
MSN
MSN
(c) APU: MSN
Total hours _____
_____ hours/_____ cycles remaining until next HSI
inspection
_____ hours/_____ cycles remaining on turbine and
compressor life limited parts
(d) Landing Gears:
Hrs/Cycles Hrs/Cycles to
Total since last next Sched. _
Position Serial No. Hrs/Cycles Overhaul Removal
-------- ---------- ---------- ---------- -------------
Nose
Right Main
Left Main
(e) Status of components or Parts with time/cycle and
calendar limits (see attached sheet)
(f) Fuel on board at return: (circle one) _____
pounds/kilos (______ gallons)
4. Other technical information regarding the Aircraft and its
components are correctly set forth on the Technical Evaluation Report (in form
of Exhibit L) attached hereto.
5. The above specified aircraft, engines, and documentation are
hereby accepted by LESSOR, subject to (a) the provisions of the Lease and (b)
correction by LESSEE (or procurement by LESSEE at LESSEE's cost) as soon as
reasonably possible of the discrepancies specified in Attachment 2 hereto.
-114-
6. Subject to the following paragraph, the leasing of the
Aircraft by LESSOR to LESSEE pursuant to the Lease is hereby terminated and
LESSOR hereby acknowledges that LESSEE has no further obligations under the
Lease except pursuant to paragraph 5(b) above and Articles 10.5, 16 and 17 of
the Lease.
7. LESSEE represents and warrants that during the term of the
Lease all maintenance and repairs to the Airframe and Engines were performed in
accordance with the requirements contained in the Lease, provided that the
foregoing representation and warranty will expire upon the completion of the
next heavy maintenance "C7" check on the Aircraft. LESSEE further confirms that
all of its obligations under the Lease which survive the termination of the
Lease by their terms will remain in full force and effect until all such
obligations have been satisfactorily completed.
8. This Return Acceptance Supplement is executed and delivered by
the parties in [place].
IN WITNESS WHEREOF, the parties hereto have caused this Return Acceptance
Receipt to be executed in their respective corporate names by their duly
authorized representatives as of the day and year first above written.
INTERNATIONAL LEASE FINANCE WESTERN PACIFIC AIRLINES, INC.
CORPORATION
By: _________________________ By: __________________________
Its: ________________________ Its: _________________________
ATTACHMENTS: 1. Aircraft Documentation
2. List of Discrepancies
3. Technical Evaluation Report (in form of Exhibit L)
-115-
ATTACHMENT 1
TO RETURN ACCEPTANCE SUPPLEMENT
-------------------------------
AIRCRAFT DOCUMENTATION
----------------------
[The (a) manuals and (b) Aircraft records and historical documents set
forth below are to be returned with the Aircraft in a current, up-to-date and
correct status]
MANUALS
-------
Name
----
1. FAA Approved Airplane Flight Manual
2. Manufacturer's Operations Manual - Volume No.____
3. Quick Reference Handbook
4. Maintenance Manuals
5. Wiring Diagram Manuals
6. Structural Repair Manual
7. Illustrated Parts Catalog
8. Vendor Illustrated Parts Catalog
9. Overhaul Manuals
10. Vendor Overhaul Manuals
11. Drawings (Major Assembly and Installation)
12. Weight and Balance Control and Loading Manual
13. Weight and Balance Manual Supplement
14. Actual Weight and Balance Compliance
-116-
AIRCRAFT RECORDS AND HISTORICAL DOCUMENTS
-----------------------------------------
1. Aircraft log book (current and file copies)
2. Aircraft Readiness Log (revised to time of return)
3. Maintenance Time Control Report (components, maintenance visit, special
items next due Airframe hours and cycles)
4. Aircraft previous maintenance visit record including the last inspection
performed.
5. Airworthiness Directive Compliance Summary
6. Rigging Document
7. Serviceable Tags for all ratable components installed (Airframe & Engines)
8. ADs requiring continuous surveillance
9. Service bulletin terminated accomplishment status
10. Service bulletin requiring continuous surveillance summary and maintenance
control action
11. Airframe and component history records
12. FAA Form 337 for Airframe, repair/overhaul certification of last major
visit
13. FAA Form 337 for each Engine, repair/overhaul certification of last shop
visit
14. Engine Readiness Log for each Engine (components installed)
15. Summary of Service Bulletin's accomplished for each Engine
16. Summary of AD's accomplished for each Engine
17. SB and AD status requiring continuous surveillance with maintenance,
control action for each Engine
18. Engine time summary sheet including life limited items (for each Engine)
19. Engine log books for each Engine (current and file copies)
-117-
Receipt of the foregoing documents, except as
noted, is hereby acknowledged.
-118-
ATTACHMENT 2
TO RETURN ACCEPTANCE SUPPLEMENT
-------------------------------
Discrepancies
-------------
-119-
EXHIBIT J MONTHLY REPORT
--------- --------------
(SEE FOLLOWING SHEET)
-120-
MONTHLY AIRCRAFT UTILIZATION AND STATUS REPORT
----------------------------------------------
To: INTERNATIONAL LEASE FINANCE CORPORATION
1999 Avenue of the Stars, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000 Fax: (000) 000-0000
From: WESTERN PACIFIC AIRLINES, INC. Page 1 of 2
AIRCRAFT TYPE: ______________ REGISTRATION: ________
ENGINE TYPE: ______________
SERIAL NUMBER: __________ MONTH OF ____________ 19__
================================================================================
AIRCRAFT TOTAL TIME SINCE NEW HRS:
--------------------------------------------------------------------------------
AIRCRAFT TOTAL CYCLES SINCE NEW CYCLES:
--------------------------------------------------------------------------------
AIRFRAME HOURS FLOWN DURING MONTH HRS:
--------------------------------------------------------------------------------
AIRFRAME CYCLES/LANDING DURING MONTH CYCLES:
--------------------------------------------------------------------------------
TIME REMAINING TO NEXT SCHEDULED "C"
CHECK
--------------------------------------------------------------------------------
TIME REMAINING TO NEXT SCHEDULED
"7C" and 22,400 FH STRUCTURED CHECK.
================================================================================
=================================================
HOURS FLOWN X US$ PER = OVERHAUL
DURING FLIGHT HOUR RESERVES
MONTH
--------------------------------------------------------------------------------
AIRFRAME HRS: X =
--------------------------------------------------------------------------------
ORIGINAL ENGINE HRS:
SERIAL NUMBER:
--------------------------------------------
ORIGINAL ENGINE HRS:
SERIAL NUMBER:
--------------------------------------------------------------------------------
TOTAL ENGINES HRS: X =
--------------------------------------------------------------------------------
AMOUNT OF OVERHAUL RESERVES (US$)
PAID THIS MONTH FOR AIRFRAME AND
ENGINES
================================================================================
-121-
Page 2 of 2
================================================================================
ENGINE SERIAL NUMBER ___________ ENGINE SERIAL NUMBER ___________
ORIGINAL POSITION ________________ ORIGINAL POSITION ________________
--------------------------------------------------------------------------------
ACTUAL LOCATION: ACTUAL LOCATION:
--------------------------------------------------------------------------------
CURRENT THRUST RATING: CURRENT THRUST RATING:
--------------------------------------------------------------------------------
HOURS: HOURS:
--------------------------------------------------------------------------------
TOTAL TIME SINCE NEW TOTAL TIME SINCE NEW
--------------------------------------------------------------------------------
TOTAL CYCLES SINCE NEW TOTAL CYCLES SINCE NEW
--------------------------------------------------------------------------------
HOURS FLOWN DURING MONTH HOURS FLOWN DURING MONTH
--------------------------------------------------------------------------------
CYCLES DURING MONTH
--------------------------------------------------------------------------------
TIME SINCE LAST SHOP VISIT (HSI) TIME SINCE LAST SHOP VISIT (HSI)
--------------------------------------------------------------------------------
TIME SINCE LAST SHOP VISIT (FULL TIME SINCE LAST SHOP VISIT (FULL
REFURBISHMENT) REFURBISHMENT)
================================================================================
NOTE: IF ILFC OWNED ENGINE IS REMOVED OR INSTALLED ON ANOTHER AIRCRAFT IT
MUST BE REPORTED MONTHLY ON THIS FORM.
-122-
EXHIBIT K AIRCRAFT DOCUMENTATION
--------- ----------------------
(SEE FOLLOWING SHEETS)
-123-
EXHIBIT L TECHNICAL EVALUATION REPORT
--------- ---------------------------
(SEE FOLLOWING SHEETS)
-124-
INTERNATIONAL LEASE FINANCE CORPORATION
AIRCRAFT/OPERATOR
TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
AIRCRAFT SUMMARY............................................................ 1
MAINTENANCE PROGRAM GENERAL................................................. 2
LANDING GEAR................................................................ 5
ENGINES ................................................................... 7
AUXILIARY POWER UNIT (APU).................................................. 12
PASSENGER CABIN CONFIGURATION............................................... 13
GALLEY PROVISIONS........................................................... 14
LAVATORIES.................................................................. 15
IN-FLIGHT AUDIO & ENTERTAINMENT SYSTEM...................................... 15
HYDRAULIC SYSTEM............................................................ 16
FUEL SYSTEM................................................................. 16
WEIGHT & BALANCE............................................................ 16
AVIONICS SYSTEMS............................................................ 17
AIRCRAFT MANUALS............................................................ 21
AIRCRAFT RECORDS AND DOCUMENTS.............................................. 23
INSPECTOR RECORD............................................................ 25
-i-
INTERNATIONAL LEASE FINANCE CORPORATION
AIRCRAFT/OPERATOR
TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------
AIRCRAFT SUMMARY
AIRCRAFT MAKE ___________ MODEL __________
FUS No. ________________ S/N _________________
MFG DATE _____ PROD No. __________ LN No. ___________________
DETAIL SPECIFICATION No. ______________ REV. _______________________________
A/C TYPE CERT No. ________________ ENG TYPE CERT No. _______________________
CURRENT REGISTRATION __________________ COUNTRY ____________________________
PREVIOUS REGISTRATION _______________ COUNTRY ______________________________
ANNUAL UTILIZATION ____________________ HOUR/CYCLE RATIO _____________________
TOTAL AIRCRAFT TIME: TAT (Hrs) ______________ AS OF
(Date) ____________________
TOTAL AIRCRAFT CYCLES: TAC (Cyc) ____________
TIME SINCE LAST "C" CHECK (Hrs) ______________ (Cyc) _________________________
TIME SINCE LAST "D" CHECK (Hrs) ______________ (Cyc) _________________________
ENGINE MAKE ______________ MODEL ___________ THRUST RATING _________________
ENGINE: 1 S/N __________ 2 S/N ___________
TSN: (Hrs) ______________ _________________
CSN: (Cyc) ______________ _________________
TIME TO (Hrs) (Hrs)
1st LIMIT: _________ (Cyc) _________ (Cyc)
Page 1
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TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------
MAINTENANCE PROGRAM GENERAL
AIRCRAFT MAINTENANCE PROGRAM OWNED BY: [ ] OPERATOR [ ] _______________________
PROGRAM APPROVED BY AUTHORITY OF: [ ] FAA APPROVED [ ] _______________________
MAINTENANCE PROGRAM/SCHEDULE (Document Title) __________________________________
REPAIR STATION PROVIDING SERVICE _______________________________________________
REPAIR STATION NUMBER __________ FAA APPROVED: [ ] YES [ ] NO
PRIMARY LINE MAINTENANCE PROVIDED BY: [ ] OPERATOR [ ] CONTRACT SERVICE
RELIABILITY CONTROLLED MAINTENANCE PROGRAM: [ ] YES [ ] NO
OPERATOR APPROVED FOR COMPONENT ESCALATION: [ ] YES [ ] NO
WHAT PERCENT WITHOUT AIRWORTHINESS AGENCY APPROVAL _____________________________
OPERATOR APPROVED FOR SCHEDULED CHECK ESCALATION: [ ] YES [ ] NO
WHAT PERCENT WITHOUT AIRWORTHINESS AGENCY APPROVAL _____________________________
METHOD OF RECORDING A/C HOURS & CYCLES: [ ] COMPUTER RUN [ ] LOG BOOK
FAA APPROVED "CORROSION PREVENTION & CONTROL PROGRAM": [ ] YES [ ] NO
CORROSION & STRUCTURAL MAINTENANCE PROGRAM: [ ] 100% [ ] SAMPLING
ALGAE CHEMICAL INHIBITOR USED IN FUEL SYSTEM: [ ] YES [ ] NO
TYPE OF INHIBITOR USED _______________ FREQ ________________________________
AIRCRAFT SUPPLEMENTAL STRUCTURAL INSPECTION "SSI" CANDIDATE: [ ] YES [ ] NO
MAINTENANCE CHECKS SCHEDULED AND RECORDED: [ ] CARD FILE [ ] COMPUTER
CONTROLLED COMPONENTS SCHEDULED AND RECORDED: [ ] CARD FILE [ ] COMPUTER
COMPONENT TAGS AVAILABLE FOR CONTROLLED COMPONENTS: [ ] YES [ ] NO
DOES OPERATOR HAVE AN APPROVED "XXX" DEFERRAL SYSTEM: [ ] YES [ ] NO
"XXX" DEFERRALS RECORDED (Document Name) _______________________________________
DOES OPERATOR HAVE A SYSTEM TO DEFER NON "XXX" ITEMS: [ ] YES [ ] NO
NON "XXX" DEFERRALS RECORDED (Document Name)____________________________________
Page 2
INTERNATIONAL LEASE FINANCE CORPORATION
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--------------------------------------------------------------------------------
MAINTENANCE & INSPECTION PROGRAM DESCRIPTION
OPERATOR'S FREQUENCY NUMBER OF
CHECK NOMENCLATURE CALENDAR HRS CYC PHASES
"A" ______________ __________ ___________ __________ ___________
"B" ______________ __________ ___________ __________ ___________
"C" ______________ __________ ___________ __________ ___________
"D" ______________ __________ ___________ __________ ___________
"CPCP" ______________ __________ ___________ __________ ___________
"Structural" ______________ __________ ___________ __________ ___________
Describe any difference to the above program, list variations and special
inspections. Explain how phases are grouped and if a higher Check zero's the
lower Checks i.e., does the "C" Check zero the "A" & "B" Checks.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
PROVIDE COPIES OF THE FOLLOWING DOCUMENTS AS CHECKED
1. AIRWORTHINESS DIRECTIVE STATUS LIST ------------------------- [ ]
2. SERVICE BULLETIN INCORPORATION LIST ------------------------- [ ]
3. CONTROLLED COMPONENT STATUS LIST ---------------------------- [ ]
4. CURRENT INSPECTIONS STATUS REPORT --------------------------- [ ]
5. LIST OF CURRENT MAJOR ALTERATIONS --------------------------- [ ]
6. CURRENT STATUS OF LIFE LIMITED PARTS ------------------------ [ ]
7. A/C "LOPA" INTERIOR CONFIGURATION DRAWING ------------------- [ ]
8. MAINTENANCE INSPECTION PROGRAM SPECIFICATION ---------------- [ ]
9. LAST WEIGHT AND BALANCE REPORT ------------------------------ [ ]
10. _______________________________________---------------------- [ ]
Page 3
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--------------------------------------------------------------------------------
MAINTENANCE & INSPECTION PROGRAM STATUS
PHASE DATE A/C TAT A/C TAC
NEXT "A" __________ _____/_____/____ _______________ _______________
LAST "A" __________ _____/_____/____ _______________ _______________
TIME REMAINING (Days) __________ (Hrs) ___________ (Cyc) ___________
NEXT "B" __________ _____/_____/____ _______________ _______________
LAST "B" __________ _____/_____/____ _______________ _______________
TIME REMAINING (Days) __________ (Hrs) ___________ (Cyc) ___________
NEXT "C" __________ _____/_____/____ _______________ _______________
LAST "C" __________ _____/_____/____ _______________ _______________
TIME REMAINING (Days) __________ (Hrs) ___________ (Cyc) ___________
NEXT "D" __________ _____/_____/____ _______________ _______________
LAST "D" __________ _____/_____/____ _______________ _______________
TIME REMAINING (Days) __________ (Hrs) ___________ (Cyc) ___________
NEXT CPCP/STRUCTURAL
__________ _____/_____/____ _______________ _______________
NEXT CPCP/STRUCTURAL
__________ _____/_____/____ _______________ _______________
TIME REMAINING (Days) __________ (Hrs) ___________ (Cyc) ___________
ANTICIPATED DATE OF NEXT SCHEDULED "C" CHECK _____/____/____
DATE OF LSAT ATC TRANSPONDER TEST: # 1 _______________ # 2 ________________
DATE OF LAST PITOT STATIC TEST: CAPT ______________ F/O ________________
DATE OF LAST ALTIMETER INST. TEST: # 1 _______________ # 2 ________________
DATE OF LAST COMPASS SWING: ___________________________________________________
DATE OF LAST FLIGHT RECORDER CHECK: ___________________________________________
DATE OF LAST A/C WEIGHING: ____________________________________________________
Page 4
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--------------------------------------------------------------------------------
LANDING GEAR
MLG TIRES: (Size) __________ (MPH Rating) ___________ (MFG) ____________
NLG TIRES: (Size) __________ (MPH Rating) ___________ (MFG) ____________
LEFT MAIN: P/N ______________________ S/N _____________________
AGENCY PERFORMING SERVICE _____________________________ CERT # _____________
LAST OVERHAUL: (Date) ____/____/____ (Hrs) __________ (Cyc) ____________
ALLOWABLE LIMIT TO NEXT OVERHAUL (Hrs) __________ (Cyc) ____________
PRESENT LANDING GEAR TOTAL TIME (Hrs) __________ (Cyc) _________
TIME REMAINING TO NEXT OVERHAUL (Hrs) __________ (Cyc) _________
RIGHT MAIN: P/N ______________________ S/N _____________________
AGENCY PERFORMING SERVICE _____________________________ CERT # _____________
LAST OVERHAUL: (Date) ____/____/____ (Hrs) __________ (Cyc) ____________
ALLOWABLE LIMIT TO NEXT OVERHAUL (Hrs) __________ (Cyc) ____________
PRESENT LANDING GEAR TOTAL TIME (Hrs) __________ (Cyc) _________
TIME REMAINING TO NEXT OVERHAUL (Hrs) __________ (Cyc) _________
NOSE: P/N ______________________ S/N _____________________
AGENCY PERFORMING SERVICE _____________________________ CERT # _____________
LAST OVERHAUL: (Date) ____/____/____ (Hrs) __________ (Cyc) ____________
ALLOWABLE LIMIT TO NEXT OVERHAUL (Hrs) __________ (Cyc) ____________
PRESENT LANDING GEAR TOTAL TIME (Hrs) __________ (Cyc) _________
TIME REMAINING TO NEXT OVERHAUL (Hrs) __________ (Cyc) _________
CENTER: P/N ______________________ S/N _____________________
AGENCY PERFORMING SERVICE _____________________________ CERT # _____________
LAST OVERHAUL: (Date) ____/____/____ (Hrs) __________ (Cyc) ____________
ALLOWABLE LIMIT TO NEXT OVERHAUL (Hrs) __________ (Cyc) ____________
PRESENT LANDING GEAR TOTAL TIME (Hrs) __________ (Cyc) _________
TIME REMAINING TO NEXT OVERHAUL (Hrs) __________ (Cyc) _________
Page 5
INTERNATIONAL LEASE FINANCE CORPORATION
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--------------------------------------------------------------------------------
LANDING GEAR (Continued)
LEFT BODY: P/N ______________________ S/N _____________________
AGENCY PERFORMING SERVICE _____________________________ CERT # _____________
LAST OVERHAUL: (Date) ____/____/____ (Hrs) __________ (Cyc) ____________
ALLOWABLE LIMIT TO NEXT OVERHAUL (Hrs) __________ (Cyc) ____________
PRESENT LANDING GEAR TOTAL TIME (Hrs) __________ (Cyc) _________
TIME REMAINING TO NEXT OVERHAUL (Hrs) __________ (Cyc) _________
RIGHT BODY: P/N ______________________ S/N _____________________
AGENCY PERFORMING SERVICE _____________________________ CERT # _____________
LAST OVERHAUL: (Date) ____/____/____ (Hrs) __________ (Cyc) ____________
ALLOWABLE LIMIT TO NEXT OVERHAUL (Hrs) __________ (Cyc) ____________
PRESENT LANDING GEAR TOTAL TIME (Hrs) __________ (Cyc) _________
TIME REMAINING TO NEXT OVERHAUL (Hrs) __________ (Cyc) _________
Page 6
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TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------
ENGINES
ENGINE MAINTENANCE PROGRAM
ENGINE MAINTENANCE PROGRAM OWNED BY ____________________________________________
PROGRAM APPROVED BY AUTHORITY OF _______________________________________________
OPERATORS MAINTENANCE PROGRAM SPECIFICATION (Copy) _____________________________
DOCUMENT NAME, NUMBER & REV. ___________________________________________________
REPAIR STATION PROVIDING SHOP SERVICE __________________________________________
REPAIR STATION NUMBER ________________ FAA APPROVED: [ ] YES [ ] NO
ENGINE MAINTENANCE PROGRAM PRIMARY MAINTENANCE PROCESS: [ ] HT [ ] OC [ ] XX
XXX (Hrs/Cyc) __________/__________ OVERHAUL (Hrs/Cyc) __________/__________
BORESCOPE INSPECTION SCHEDULE FREQ: (Hrs/Cyc) _____________________________
HOT SECTION INSPECTION SCHEDULE FREQ: (Hrs/Cyc) _________________________
ENGINE CONDITION MONITORING TREND ANALYSIS PROGRAM: [ ] YES [ ] NO
SERVICE PROVIDED BY ____________________________________________________________
OIL SPECIAL ANALYSIS PART OF PROGRAM: [ ] YES [ ] NO (Freq) ___________
SERVICE PROVIDED BY ____________________________________________________________
ENGINE OIL TYPE _______________ CSD/IDG _______________ STARTER ____________
Engine(s) operated at INCREASED or DECREASED Thrust Rating Program
limitations & required Mods. to operate at designated thrust rating
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
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INTERNATIONAL LEASE FINANCE CORPORATION
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TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------
ENGINE SPECIFICATIONS
ENGINE NUMBER 1
ENGINE MAKE __________________ MODEL __________________ S/N __________________
DATE OF MFG: _________________ TOTAL TIME: (Hrs) __________ (Cyc) __________
LAST HOT SECTION (Date) ____________________ (Hrs) __________ (Cyc) __________
LAST OVERHAUL VISIT (Date) _________________ (Hrs) __________ (Cyc) __________
LAST SHOP VISIT (Date) _____________________ (Hrs) __________ (Cyc) __________
WORK SCOPE _____________________________________________________________________
AGENCY PERFORMING SERVICE ______________________________________________________
AGENCY FAA APPROVED: [ ] YES [ ] NO CERT. #____________________________
1st LIMITED DISK/MODULE: ________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _______________ (Cyc) _______________
TOTAL COMPONENT TIME: (Hrs) _______________ (Cyc) _______________
TIME REMAINING (Hrs) _______________ (Cyc) _______________
2nd LIMITED DISK/MODULE: ________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _______________ (Cyc) _______________
TOTAL COMPONENT TIME: (Hrs) _______________ (Cyc) _______________
TIME REMAINING (Hrs) _______________ (Cyc) _______________
3rd LIMITED DISK/MODULE: ________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _______________ (Cyc) _______________
TOTAL COMPONENT TIME: (Hrs) _______________ (Cyc) _______________
TIME REMAINING (Hrs) _______________ (Cyc) _______________
4th LIMITED DISK/MODULE: ________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _______________ (Cyc) _______________
TOTAL COMPONENT TIME: (Hrs) _______________ (Cyc) _______________
TIME REMAINING (Hrs) _______________ (Cyc) _______________
Page 8
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--------------------------------------------------------------------------------
ENGINE SPECIFICATIONS
ENGINE NUMBER 2
ENGINE MAKE __________________ MODEL __________________ S/N __________________
DATE OF MFG: _________________ TOTAL TIME: (Hrs) __________ (Cyc) __________
LAST HOT SECTION (Date) ____________________ (Hrs) __________ (Cyc) __________
LAST OVERHAUL VISIT (Date) _________________ (Hrs) __________ (Cyc) __________
LAST SHOP VISIT (Date) _____________________ (Hrs) __________ (Cyc) __________
WORK SCOPE _____________________________________________________________________
AGENCY PERFORMING SERVICE ______________________________________________________
AGENCY FAA APPROVED: [ ] YES [ ] NO CERT. #____________________________
1st LIMITED DISK/MODULE: ________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _______________ (Cyc) _______________
TOTAL COMPONENT TIME: (Hrs) _______________ (Cyc) _______________
TIME REMAINING (Hrs) _______________ (Cyc) _______________
2nd LIMITED DISK/MODULE: ________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _______________ (Cyc) _______________
TOTAL COMPONENT TIME: (Hrs) _______________ (Cyc) _______________
TIME REMAINING (Hrs) _______________ (Cyc) _______________
3rd LIMITED DISK/MODULE: ________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _______________ (Cyc) _______________
TOTAL COMPONENT TIME: (Hrs) _______________ (Cyc) _______________
TIME REMAINING (Hrs) _______________ (Cyc) _______________
4th LIMITED DISK/MODULE: ________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _______________ (Cyc) _______________
TOTAL COMPONENT TIME: (Hrs) _______________ (Cyc) _______________
TIME REMAINING (Hrs) _______________ (Cyc) _______________
Page 9
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--------------------------------------------------------------------------------
ENGINE SPECIFICATIONS
ENGINE NUMBER 3
ENGINE MAKE __________________ MODEL __________________ S/N __________________
DATE OF MFG: _________________ TOTAL TIME: (Hrs) __________ (Cyc) __________
LAST HOT SECTION (Date) ____________________ (Hrs) __________ (Cyc) __________
LAST OVERHAUL VISIT (Date) _________________ (Hrs) __________ (Cyc) __________
LAST SHOP VISIT (Date) _____________________ (Hrs) __________ (Cyc) __________
WORK SCOPE _____________________________________________________________________
AGENCY PERFORMING SERVICE ______________________________________________________
AGENCY FAA APPROVED: [ ] YES [ ] NO CERT. #____________________________
1st LIMITED DISK/MODULE: ________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _______________ (Cyc) _______________
TOTAL COMPONENT TIME: (Hrs) _______________ (Cyc) _______________
TIME REMAINING (Hrs) _______________ (Cyc) _______________
2nd LIMITED DISK/MODULE: ________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _______________ (Cyc) _______________
TOTAL COMPONENT TIME: (Hrs) _______________ (Cyc) _______________
TIME REMAINING (Hrs) _______________ (Cyc) _______________
3rd LIMITED DISK/MODULE: ________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _______________ (Cyc) _______________
TOTAL COMPONENT TIME: (Hrs) _______________ (Cyc) _______________
TIME REMAINING (Hrs) _______________ (Cyc) _______________
4th LIMITED DISK/MODULE: ________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _______________ (Cyc) _______________
TOTAL COMPONENT TIME: (Hrs) _______________ (Cyc) _______________
TIME REMAINING (Hrs) _______________ (Cyc) _______________
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ENGINE SPECIFICATIONS
ENGINE NUMBER 4
ENGINE MAKE __________________ MODEL __________________ S/N __________________
DATE OF MFG: _________________ TOTAL TIME: (Hrs) __________ (Cyc) __________
LAST HOT SECTION (Date) ____________________ (Hrs) __________ (Cyc) __________
LAST OVERHAUL VISIT (Date) _________________ (Hrs) __________ (Cyc) __________
LAST SHOP VISIT (Date) _____________________ (Hrs) __________ (Cyc) __________
WORK SCOPE _____________________________________________________________________
AGENCY PERFORMING SERVICE ______________________________________________________
AGENCY FAA APPROVED: [ ] YES [ ] NO CERT. #____________________________
1st LIMITED DISK/MODULE: ________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _______________ (Cyc) _______________
TOTAL COMPONENT TIME: (Hrs) _______________ (Cyc) _______________
TIME REMAINING (Hrs) _______________ (Cyc) _______________
2nd LIMITED DISK/MODULE: ________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _______________ (Cyc) _______________
TOTAL COMPONENT TIME: (Hrs) _______________ (Cyc) _______________
TIME REMAINING (Hrs) _______________ (Cyc) _______________
3rd LIMITED DISK/MODULE: ________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _______________ (Cyc) _______________
TOTAL COMPONENT TIME: (Hrs) _______________ (Cyc) _______________
TIME REMAINING (Hrs) _______________ (Cyc) _______________
4th LIMITED DISK/MODULE: ________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _______________ (Cyc) _______________
TOTAL COMPONENT TIME: (Hrs) _______________ (Cyc) _______________
TIME REMAINING (Hrs) _______________ (Cyc) _______________
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AUXILIARY POWER UNIT (APU)
APU MAKE __________________ MODEL __________________ S/N _____________________
DATE OF MFG _______________ TOTAL TIME: (Hrs) __________ (Cyc)N1 /N2
APU MAINTENANCE PROGRAM IS: [ ] O/C [ ] C/M [ ] H/T
APU TIMES ARE RECORDED BY: [ ] APU CLOCK or [ ] A/C TIME RATIO ____:____
TIME BETWEEN OVERHAUL (Hrs) __________ (Cyc) ____________
TIME BETWEEN HOT SECTION INSPECTIONS (Hrs) __________ (Cyc) ____________
LAST HOT SECTION (Date) _________________ (Hrs) __________ (Cyc) ____________
LAST OVERHAUL (Date) ____________________ (Hrs) __________ (Cyc) ____________
LAST SHOP VISIT (Date) __________________ (Hrs) __________ (Cyc) ____________
WORK SCOPE _____________________________________________________________________
AGENCY PERFORMING SERVICE ______________________________________________________
AGENCY FAA APPROVED: [ ] YES [ ] NO CERT. #________________________
1st LIMITED DISK/MODULE: _______________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _____________ (Cyc) ______________
TOTAL COMPONENT TIME: (Hrs) _____________ (Cyc) ______________
TIME REMAINING: (Hrs) _____________ (Cyc) ______________
2nd LIMITED DISK/MODULE: _______________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _____________ (Cyc) ______________
TOTAL COMPONENT TIME: (Hrs) _____________ (Cyc) ______________
TIME REMAINING: (Hrs) _____________ (Cyc) ______________
3rd LIMITED DISK/MODULE: _______________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _____________ (Cyc) ______________
TOTAL COMPONENT TIME: (Hrs) _____________ (Cyc) ______________
TIME REMAINING: (Hrs) _____________ (Cyc) ______________
4th LIMITED DISK/MODULE: _______________________________________________________
ALLOWABLE LIFE/INSP LIMIT: (Hrs) _____________ (Cyc) ______________
TOTAL COMPONENT TIME: (Hrs) _____________ (Cyc) ______________
TIME REMAINING: (Hrs) _____________ (Cyc) ______________
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PASSENGER CABIN CONFIGURATION
SEATING CONFIGURATION
MAX CERTIFIED OCCUPANCY _____ PRESENT CONFIGURATION OCCUPANCY ______________
NO. OF HANDICAP SEATS INSTALLED __________
FIRST CLASS
PAX _____ SEAT MFG __________ MODEL ___________ P/N ________________
SEATS FIREBLOCKED [ ] YES [ ] NO COLOR ______________________________
BUSINESS CLASS
PAX _____ SEAT MFG __________ MODEL ___________ P/N ________________
SEATS FIREBLOCKED [ ] YES [ ] NO COLOR ______________________________
COACH CLASS
PAX _____ SEAT MFG __________ MODEL ___________ P/N ________________
SEATS FIREBLOCKED [ ] YES [ ] NO COLOR ______________________________
UPPER DECK
PAX _____ SEAT MFG __________ MODEL ___________ P/N ________________
SEATS FIREBLOCKED [ ] YES [ ] NO COLOR ______________________________
SEAT BAGGAGE RESTRAINTS INSTALLED: [ ] YES [ ] NO
PROVISIONS FOR LIFE VESTS UNDER SEAT: [ ] YES [ ] NO
ENTERTAINMENT CONTROLS INSTALLED: [ ] YES [ ] NO
SEATS/SEAT BELTS, TSO CONFORMITY: [ ] YES [ ] NO
SEAT BELTS PART NUMBER _____________________ COLOR _________________________
CONFIGURATION DRAWING No. _______________________ SOURCE ___________________
ENGINEERING ORDER/INSTALLATION DOCUMENT ________________________________________
INSTALLATION FAA APPROVED: [ ] YES [ ] NO METHOD OF APPROVAL: ____________
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GALLEY PROVISIONS
GALLEY MODEL PART EQUIPPED
LOCATION MANUFACTURER NUMBER NUMBER WATER POWER
1. _____________ _____________ _____________ ______________ [ ] [ ]
2. _____________ _____________ _____________ ______________ [ ] [ ]
3. _____________ _____________ _____________ ______________ [ ] [ ]
4. _____________ _____________ _____________ ______________ [ ] [ ]
5. _____________ _____________ _____________ ______________ [ ] [ ]
6. _____________ _____________ _____________ ______________ [ ] [ ]
7. _____________ _____________ _____________ ______________ [ ] [ ]
8. _____________ _____________ _____________ ______________ [ ] [ ]
9. _____________ _____________ _____________ ______________ [ ] [ ]
10. _____________ _____________ _____________ ______________ [ ] [ ]
NOTE: Galley Locations per Spec or LOPA drawing i.e., G1, G2 etc. Galley
Location numbers above correspond to the number below
OVENS BUN REFER COFFEE WATER HOT HOT XXX
WARMERS UNITS CHILLERS MAKERS BOILERS JUGS CUPS JUGS
_____ _______ _____ ________ ______ _______ _______ ______ ______
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
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LAVATORIES
NUMBER OF LAVATORIES ___________________ TYPE: [ ] FLUSH or [ ] VACUUM
LOCATIONS: ____________________________ HANDICAP PROVISIONS: ________
COLOR SCHEME: _________________________________________________________________
IN-FLIGHT AUDIO & ENTERTAINMENT SYSTEM
BOARDING MUSIC: [ ] YES [ ] NO
AUTO EVAC & WARNING: [ ] YES [ ] NO
PRE-RECORDED ANNOUNCEMENT: [ ] YES [ ] NO
PASSENGER ENTERTAINMENT (Audio): [ ] YES [ ] NO
PASSENGER ENTERTAINMENT (Video): [ ] YES [ ] NO
[ ] PROJECTOR [ ] PSU MONITOR [ ] ISLE MONITOR [ ] IN-SEAT
PASSENGER EN-ROUTE INFORMATION DISPLAY: [ ] YES [ ] NO
INTERIOR COLORS, SIGNS & PLACARDS
INTERIOR COLOR SCHEME CARPETS _______________ CURTAINS _________________
GALLEY FLOOR MATS ___________ GALLEY DECORATIVE FACING ________________________
CEILING PANELS ______________ OVERHEAD BAGGAGE BINS ___________________________
BULKHEADS, WINDSCREEN & CLASS DIVIDERS _________________________________________
LOWER SIDEWALL PANELS _______ SIDE WALL PANELS ________________________
LAVATORY WALL PANELS _______ LAVATORY FLOOR MATS __________________________
PLACARDS & LIGHTED SIGNS ENGLISH [ ] YES [ ] NO BI-LINGUAL [ ] YES [ ] NO
FIRST LANGUAGE ________________ SECOND LANGUAGE _________________________
FLOOR TRACK LIGHTING INSTALLED [ ] YES [ ] NO MFG _____________________________
FLOOR TRACK LIGHTING INSTALLED [ ] AT PRODUCTION [ ] POST DELIVERY
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HYDRAULIC SYSTEM
TYPE OF HYDRAULIC FLUID USED __________________ (MFG) ______________________
FUEL SYSTEM
FUEL CAPACITY (US GAL) __________________ (LBS/KILOS) ________________________
NUMBER OF TANKS _________________ AUXILIARY TANKS INSTALLED: [ ] YES [ ] NO
AUXILIARY TANK CAPACITY (U.S. GAL) __________ (LBS/KILOS) __________________
FUEL DUMP SYSTEM INSTALLED: [ ] YES [ ] NO
FUEL INSTRUMENTATION / CALIBRATION: [ ] U.S. POUNDS [ ] KILOGRAMS
WEIGHT & BALANCE
HAS AIRCRAFT BEEN MODIFIED FOR INCREASED GROSS WEIGHT: [ ] YES [ ] NO
FROM ______________ MTGW TO ____________________ MTGW
GROSS WEIGHT MODIFICATION AUTHORIZED BY WHAT DOCUMENT: _________________________
PERMANENT BALLAST INSTALLED TO CORRECT C.G. IMBALANCE: [ ] YES [ ] NO
IF YES, LOCATION OF BALLAST ______________ WEIGHT IN U.S. LBS. _____________
WEIGHT & BALANCE CONTROL COMPUTER SYSTEM INSTALLED: [ ] YES [ ] NO
WEIGHT & BALANCE MANUAL DOCUMENT NO. __________________ REV _________________
For the below weights specify the source: [ ] AFM [ ] DESIGN SPECIFICATION
POUNDS KILOS
MAXIMUM TAKEOFF GROSS WEIGHT (MTOGW) ___________________/__________________
MAXIMUM TAXI WEIGHT (MTW) ___________________/__________________
MAXIMUM LANDING WEIGHT (MLW) ___________________/__________________
MANUFACTURERS EMPTY WEIGHT (MEW) ___________________/__________________
MAXIMUM ZERO FUEL WEIGHT (MZW) ___________________/__________________
OPERATIONAL EMPTY WEIGHT (OEW) - ___________________/__________________
MAXIMUM PAYLOAD = ___________________/__________________
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AVIONICS SYSTEMS
22 AUTO FLIGHT
MODEL or
QTY COMPONENT MANUFACTURER PART NUMBER
_____ FLIGHT CONTROL COMPUTER: _________________ __________________
_____ AUTOTHROTTLE COMPUTER: _________________ __________________
_____ STAB AUG COMPUTER: _________________ __________________
_____ STALL MANAGEMENT COMPUTER: _________________ __________________
_____ AUTOFLIGHT ACCESSORY UNIT _________________ __________________
_____ FLIGHT INSTRUMENT ACCESSORY UNIT: _________________ __________________
_____ AUTO PILOT SYSTEM: _________________ __________________
_____ FLIGHT DIRECTOR: _________________ __________________
_____ PITCH COMPUTER _________________ __________________
_____ ROLL COMPUTER _________________ __________________
23 COMMUNICATIONS
_____ PA AMPLIFIER: _________________ __________________
_____ HF TRANSCEIVER _________________ __________________
_____ VHF TRANSCEIVER _________________ __________________
_____ COCKPIT VOICE RECORDER: _________________ __________________
_____ TAPE REPRODUCER _________________ __________________
(Pre-Recorded PAX Address)
_____ TAPE REPRODUCER _________________ __________________
(Audio) ENTERTAINMENT:
_____ TAPE REPRODUCER _________________ __________________
(Video) ENTERTAINMENT:
_____ SELCAL DECODER: _________________ __________________
_____ ACARS MANAGEMENT UNIT _________________ __________________
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AVIONICS SYSTEMS (Continued)
31 INDICATING AND RECORDING
MODEL or
QTY COMPONENT MANUFACTURER PART NUMBER
FLIGHT DATA
_____ RECORDER (DFDR): _________________ __________________
DIGITAL FLIGHT DATA
_____ ACQUISITION UNIT (DFDAU): _________________ __________________
_____ ACCELEROMETER: _________________ __________________
_____ WEIGHT AND BALANCE
COMPUTER: _________________ __________________
ELECTRONIC FLIGHT INSTRUMENT SYSTEM
EFIS DISPLAY PANEL ADI
_____ (Attitude) / FLIGHT DISPLAY: _________________ __________________
EFIS DISPLAY PANEL HIS
_____ (Directional) / NAV DISPLAY: _________________ __________________
_____ EFIS SYMBOL GENERATORS: _________________ __________________
ENGINE INDICATING AND CREW ALERTING SYSTEM (EICAS)
EICAS DISPLAY PANEL/UNIT _________________ __________________
_____ (Primary):
EICAS DISPLAY PANEL/UNIT _________________ __________________
______ (Secondary):
______ EFIS/EICAS INTERFACE UNIT: _________________ __________________
AIRPLANE CONDITION MONITORING SYSTEM (ACMS)
_____ DATA MANAGEMENT UNIT (DMU): _________________ __________________
_____ AIRBORNE DATA LOADER: _________________ __________________
_____ AIR DATA COMPUTER: _________________ __________________
GROUND PROXIMITY WARNING _________________ __________________
_____ SYSTEM (GPWS) COMPUTER:
_____ WINDSHEAR SYSTEM: [ ] YES [ ] NO
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AVIONICS SYSTEMS (Continued)
34 NAVIGATION
MODEL or
QTY COMPONENT MANUFACTURER PART NUMBER
INERTIAL REFERENCE SYSTEM (IRS)
INERTIAL REFERENCE
_____ UNIT (IRU): _________________ __________________
OMEGA NAVIGATION SYSTEM (ONS)
RECEIVER PROCESSOR
_____ UNIT (RPU): _________________ __________________
_____ CONTROL DISPLAY UNIT (CDU): _________________ __________________
VHF NAVIGATION
DISTANCE MEASURING EQUIPMENT
_____ (DME) INTERROGATORS: _________________ __________________
_____ VHF VOR/ILS RECEIVER: _________________ __________________
_____ VHF VOR/MKR RECEIVER _________________ __________________
_____ VHF ILS/only RECEIVER: _________________ __________________
RADIO DIGITAL DISTANCE
_____ MAGNETIC INDICATOR (RDDMI): _________________ __________________
_____ RADIO MAGNETIC INDICATOR: _________________ __________________
_____ RADIO ALTIMETER TRANSCEIVER: _________________ __________________
_____ WEATHER RADAR TRANSCEIVER: _________________ __________________
TRAFFIC ALERT AND COLLISION
AVOIDANCE
_____ SYSTEM (TCAS) COMPUTER: _________________ __________________
AIR TRAFFIC CONTROL (ATC)
_____ SYSTEM TRANSPONDER: _________________ __________________
_____ MICRO WAVE LANDING RECEIVER: _________________ __________________
_____ MARKER BEACON RECEIVER _________________ __________________
AUTOMATIC DIRECTION FINDER _________________ __________________
_____ (ADF) RECEIVER:
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AVIONICS SYSTEMS (Continued)
34 NAVIGATION
MODEL or
QTY COMPONENT MANUFACTURER PART NUMBER
FLIGHT MANAGEMENT COMPUTER SYSTEM (FMCS)
_____ FLIGHT MANAGEMENT COMPUTER: _________________ __________________
_____ CONTROL DISPLAY UNIT (CDU): _________________ __________________
_____ CONTROL DISPLAY UNIT (CDU): _________________ __________________
45 CENTRAL MAINTENANCE SYSTEM (CMS)
CENTRAL MAINTENANCE
_____ COMPUTER: _________________ __________________
MAINTENANCE CONTROL
_____ AND DISPLAY PANEL: _________________ __________________
_____ PRINTER: _________________ __________________
77 ENGINE INDICATING
PRIMARY ENGINE DISPLAY
_____ PANEL: _________________ __________________
SECONDARY ENGINE DISPLAY
_____ PANEL: _________________ __________________
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AIRCRAFT MANUALS
MANUAL or DOCUMENT DOCUMENT No. REV QTY QTY
MICRO HARD
FILM COPY
1 FAA APPROVED FLIGHT MANUAL: ________________ _____ _______ ______
2 AIRPLANE FLIGHT OPERATION
MANUAL: ________________ _____ _______ ______
3 AIRCRAFT RECOVER MANUAL: ________________ _____ _______ ______
4 QUICK REFERENCE HANDBOOK
(QRH): ________________ _____ _______ ______
5 WEIGHT AND BALANCE MANUAL: ________________ _____ _______ ______
6 AIRCRAFT FUELING MANUAL: ________________ _____ _______ ______
7 AIRCRAFT MAINTENANCE MANUAL
(MM): ________________ _____ _______ ______
8 AIRCRAFT MAINTENANCE MANUAL
SUPPLEMENT: ________________ _____ _______ ______
9 RAMP MAINTENANCE MANUAL
(RMM): ________________ _____ _______ ______
10 CARGO LOADING MANUAL: ________________ _____ _______ ______
11 FAULT REPORTING MANUAL (FRM): ________________ _____ _______ ______
12 FAULT ISOLATION MANUAL (FIM): ________________ _____ _______ ______
13 ILLUSTRATED PARTS CATALOG
(IPC): ________________ _____ _______ ______
14 LIFE LIMITED PARTS MANUAL: ________________ _____ _______ ______
15 STRUCTURAL REPAIR MANUAL
(SRM): ________________ _____ _______ ______
16 APERTURE CARDS: ________________ _____ _______ ______
17 WIRING DIAGRAM MANUAL (WD): ________________ _____ _______ ______
18 WIRING PRACTICES MANUAL: ________________ _____ _______ ______
19 SYSTEM SCHEMATICS MANUAL: ________________ _____ _______ ______
20 B.I.T.E. MANUAL: ________________ _____ _______ ______
21 NON-DESTRUCTIVE TEST MANUAL: ________________ _____ _______ ______
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22 CORROSION PREVENTION MANUAL: ________________ _____ _______ ______
23 AIRCRAFT OVERHAUL MANUAL
(OHM): ________________ _____ _______ ______
24 COMPONENT MAINTENANCE MANUAL: ________________ _____ _______ ______
25 APU LOG BOOK: ________________ _____ _______ ______
26 ENGINE MAINTENANCE MANUAL: ________________ _____ _______ ______
27 ENGINE LOG BOOK: ________________ _____ _______ ______
28 ENGINE ILLUSTRATED PARTS
CATALOG: ________________ _____ _______ ______
29 ENGINE DATA SUBMITTAL BOOK: ________________ _____ _______ ______
30 ENGINE OVERHAUL MANUAL: ________________ _____ _______ ______
31 POWER PLANT BUILD-UP MANUAL: ________________ _____ _______ ______
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AIRCRAFT RECORDS AND DOCUMENTS
AVAILABLE
1 CERTIFICATE OF AIRWORTHINESS [ ]
2 EXPORT CERTIFICATE OF AIRWORTHINESS [ ]
3 COPY OF ORIGINAL EXPORT CERTIFICATE OF AIRWORTHINESS
4 OPERATOR'S SCHEDULED MAINTENANCE AND INSPECTION PROGRAM
SPECIFICATION (to include component limits) [ ]
5 OPERATOR ACCIDENT/INCIDENT STATEMENT [ ]
6 ORIGINAL AIRCRAFT READINESS LOG [ ]
7 OPERATOR EMERGENCY EQUIPMENT LAYOUT [ ]
8 AIRCRAFT TECHNICAL LOG CURRENT OPERATOR [ ]
9 AIRCRAFT TECHNICAL LOG PREVIOUS OPERATOR [ ]
10 CURRENT FUEL SAMPLE MICROBIAL GROWTH LABORATORY RESULTS [ ]
11 AIRCRAFT FLIGHT LOG OR FLIGHT TIME REPORT [ ]
12 ENGINE CONDITION MONITORING REPORT [ ]
13 ENGINE LOG CURRENT OPERATOR [ ]
14 CURRENT ENGINE DISC SHEET [ ]
15 ENGINE LOG PREVIOUS OPERATOR (including Delivery Records) [ ]
16 APU/ENGINE LOG & HISTORICAL RECORDS [ ]
17 APU/ENGINE SHOP VISIT REPORTS/RECORDS [ ]
18 TIME CONTROLLED / LIFE LIMITED COMPONENT STATUS FOR
AIRFRAME, ENGINES, LANDING GEAR AND APU
(including component tags) [ ]
19 FAA AIRWORTHINESS DIRECTIVE STATUS LIST [ ]
20 FAA AIRWORTHINESS DIRECTIVE METHOD OF COMPLIANCE DOCUMENTS [ ]
21 FAA REPETITIVE AIRWORTHINESS DIRECTIVE STATUS LIST [ ]
22 INTERIOR MATERIAL BURN CERTIFICATES [ ]
23 AIRCRAFT WEIGHT AND BALANCE RECORDS & EQUIPMENT LIST (Current) [ ]
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AVAILABLE
24 EXPLANATION OF ANY OPERATOR SAMPLING PROGRAMS [ ]
25 MAJOR REPAIR / MAJOR ALTERATION RECORDS (to include
STC's, FAA 337's, Operator EO's, 8110-3's [ ]
26 LIST OF NON-TSO'D ITEMS INSTALLED ON AIRCRAFT [ ]
27 SERVICE BULLETIN & ALL OPERATOR LETTER INCORPORATION LIST [ ]
28 OPERATOR DENT AND DAMAGE REPORT/MAP [ ]
29 AIRCRAFT INSPECTION STATUS & "CHECK RECORDS" [ ]
30 OPERATOR COMPONENT PART NUMBER TO MANUFACTURER PART NUMBER
CROSS REFERENCE [ ]
31 GALLEY CERTIFICATE OF SANITARY CONSTRUCTION [ ]
32 FLIGHT CONTROL BALANCE RECORDS [ ]
33 FLIGHT DATA RECORDER READOUT OF PARAMETERS [ ]
34 DEFERRED ITEMS LIST [ ]
35 AIRFRAME AND ENGINE OWNERSHIP PLACARDS [ ]
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INSPECTOR RECORD
INSPECTED BY ____________________ DATE _______________________________
OPERATOR ________________________ REGISTERED OWNER ________________________
ADDRESS OF OPERATOR ____________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
CONTACT (Name/Title) ___________________________________________________________
PHONE ________________________ FAX _____________________________________
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